Unit
Objectives At the end of this unit you will be able to:
1. Discuss how toconduct market research
2. Describe the 4Ps of marketing
3. Discuss the importance of idea generation
.Remembering basic business terms
5.
Discuss the need for CRM
6.Discuss the benefits of CRM
7. Discuss the need for networking
8. Discuss the benefits of networking
9. Understand the importance of setting 4 goals 444.
Distinguish between short,medium and longterm goals
11. Discuss writing a business plan
12. Explain the financial planning process
13. Discuss ways to manage risk
Describe
the procedures and formalities for applying for bank financing
15.
The location and needs of the target market
.Thereare
companiesintheentireindustry. Relevant Competitors
Market research involves two types of data:
. main information. This is research collected by you or someone youhire.
.Secondary information. This is research that already exists,readytobefound and used.
Preliminarystudy
Thefirststudy can last two years
. Exploratory: This isopen-ended and usually involves detailedand unstructured interviews
.
Specific: Thesearepre-structured formal interviews. Conducting specific research is mo
Secondary research
Secondary research uses informationfrom outside sources. Some common secondary resourcesare:
Public Resources: These are usually free and contain a lot of good information,e.g. government services, public libraryoperations, etc.
Commercial sources: theseprovide valuable information but are oftenchargeable,e.g.
Research and trade associations, banks and other financial institutions, etc.
Educational Institution:Thisprovides a wealth of information suchasuniversities, technical colleges,etc.
The 4Ps of Marketing
The 4Ps of Marketing are
1. Product,
2: Price
3.
Promotion and
4. Location
Let’s learnmoreabout these 4 P.
Products
products can be:
.Tangible
.IntangibleServices
Whatever your product, it is crucialto have a clear understanding of what you offer and its unique features
before you begin the marketing process Herearesome questions to ask yourself:
.
What docustomersexpect from the product/service?
. What need does it meet?
.Can more features be added?
Does it have expensive and unnecessary features?
. How will customers use it?
.
What should it be called?
. How is it different from similar products?
.Whatisthemanufacturingcost?
Can it be sold for profit?
Price
Once all the elements of theproduct have been determined, the price factor must be considered. Product prices will depend on various factors such as profit margins, supply of demand and marketing strategy
Some questions to ask yourself are
. What is the value of the product/service to thecustomer?
.Isthereafixedpriceforthe local product/service?
. Arecustomers price sensitive?
…Should discounts be offered?
. How do your pricescompare to those of your competitors?
Promotions
Once you haveidentified your products and theirprices, the next step is to find ways to promote them. Some ofthe key elements of promotion include advertising, public relations, social media marketing, email marketing, search and marketing video marketing,etc.
Herearesome questions to ask yourself:
. Where should you promote your product or service?
.
What is the best medium to reach your target audience?
. When is the best time to promote your product?
• How do your competitors market their products?
Place
Mostmarketersbelievethat marketing is having the right productintherightplace at the right price at the right time.
Therefore,choosing the best location is crucialin converting potentialcustomers into actual customers.
Herearesome questions to ask yourself:
. Will your product or service be soughtafterin-store,online, or both?
. What should you do to access the most suitable distribution channel?
.Do you need a salesperson?
. Where do your competitors offer their products or services?
.
Should you follow in your competitor’s footsteps?
• Do you needto do something different from your competition?
THEIMPORTANCEOFIDEAS
Ideas are the basis of progress. An idea can be small or revolutionary, easy to implement or complex to implement. Eitherway, the fact that it’s an idea gives it value.
Without ideas, nothing is possible. Most people are afraid to speak up for fear of being laughedat. However, asan entrepreneur and wanting to stay competitive and innovative, you need to bring your ideas to the publicat
.Create a culture of brainstorming where you cancontributeto all parties involved
. Discuss ideas out loud so people can add thosethoughts, views, and opinions
.
Keepan open mind and don’tlimit your thoughts, even if the idea seems ridiculous
. Insteadofthrowingawaythoughts that you don’t dealwithrightaway,trywritingthemdownandputtingthem on a
shelfsoyoucanrevisit them later.
Invite
.Remember that good ideas are not always unique.
.
Remember that timing plays animportant role in determining whether your ideawillbesuccessful.
.Circumstances and circumstances always change, so be flexible and adjust your thinking accordingly
Business Entity Concepts: Basic Business Terminology
If your goal is to start and run a business, then you have a good understanding of basic tradingtermsiscrucial. should be familiarwith the following terms:
Accounting: A systematic method of recording and reporting financial transactions.
Accounts payable: Sums owed by the company to creditors.
Accounts Receivable: The amount a businessowes its customers.
Assets: Allofthe value that a business owns and uses to run its business.
Balance Sheet: Anoverview of a company’s assets, liabilities and equity at a specificpointintime.
Bottom Line: The total amount gainedorlostby a business at the end of the month
Business: An organization whosepurposeistomake a profit.
Business-to-Business (828): A business that sells goods or services to another business
Business-to-Consumer (B2C): A business that sells goods or services directly and investments.
The two main types of capital are
debt and equity.
Cash Flow: The overall monthly movement of funds through a business, including income and expenses.
Cash Flow Statement: A statement showing money flowingin and outof a business during a specifiedperiod.
Contract: a formal agreement to payfor work
Depreciation: thedepreciated value of an asset over time,
Expenses:the costs a business incurs inthecourseof its operations
Finance: the management and distribution of funds and other assets
Financial information:Consolidated account of operations and expenses
Fixed costs:Non-recurringexpenses.
ProfitandLoss Statement (Profit and Loss Statement): Indicates the profitability of a business over a period of time.
Liabilities: The value that a company owes to others.
Marketing: The process of promoting, selling and distributing products or services.
Net Revenue/Profit:revenueless expenses.
Net Worth: The total value of the business
Payback Period: The time it takes thebusiness to recoupits initial investment.
Profit Margin: Profit divided by sales,expressed as a percentage.
Return on Investment (ROI): The amount of returnoninvestment a business receives.
Income:Gross income before expenses.
Sales prospects:Potentialcustomers:
Suppliers:Suppliers of a company.
Target Market: Thetargetcustomer group forthe company’s products and services
Valuation: An estimate of the overall value of the company.
Variable costs: Expenses associatedwithbusinessactivities.
Working capital:calculated as current assets less current liabilities.
CRM andtheWeb
What is CRM?
CRM stands for Customer Relationship Management. Originally, the termcustomerrelationshipmanagement meant managing relationships with customers. Today,however, it refers to computer systems and software designed to help businesses manage their relationships.
The need for CRM
The better a company can manage its relationship with its customers, the betterits chances of success. The ability to successfully retain existing customers and growyourbusiness is extremelyimportanttoanyentrepreneur.That’s why there’sagrowingneedfor IT systems that focus on solvingday-to-daycustomerrelationshipissues.
Customer needs change over time, and technology makes it easier to understand what customers really want. This insight helps businesses be more responsive to customerneeds.Thisallows them to adjust business operations ifnecessary so that customers are always served in the best possibleway.
Inshort, CRM helps businessesrealize the value of their customers and allows them to capitalize on improved customer relationships.