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Entrepreneurial Behavior and Marketing Concepts

The document discusses the influences on entrepreneurial behavior, focusing on idea generation and screening, as well as the evolution of marketing concepts. It outlines key marketing terminologies, the marketing mix (4 Ps), pricing strategies, and the preparation of a marketing plan. Additionally, it covers finance's role in business operations, sources of finance, and an investment plan template.

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Haj Husein
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6 views39 pages

Entrepreneurial Behavior and Marketing Concepts

The document discusses the influences on entrepreneurial behavior, focusing on idea generation and screening, as well as the evolution of marketing concepts. It outlines key marketing terminologies, the marketing mix (4 Ps), pricing strategies, and the preparation of a marketing plan. Additionally, it covers finance's role in business operations, sources of finance, and an investment plan template.

Uploaded by

Haj Husein
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

EME 314

INFLUENCES ON ENTREPRENEURIAL BEHAVIOUR


IDEA GENERATION AND
SCREENING
Idea generation or ideation is the
act of forming ideas
1. Two types or ways of idea
generation
- Market pull ideas
- Technological push ideas

2. Idea screening
Criteria used for screening ideas
- Marketing criteria
- Operation criteria
- Financial criteria
MARKETING
- EVOLUTION OF CONCEPTS -
 The Production Concept
 The Product Concept
 The Selling Concept, and
 The Marketing Concept
THE PRODUCTION CONCEPT

 The production concept holds that


consumers will favour those products that are
widely available and low in cost.

 Managers of production-oriented
organizations concentrate on achieving high
production efficiency and wide distribution
coverage.
THE PRODUCT CONCEPT

 The product concept holds that consumers

will favour those products that offer the most


quality or performance.

 Managers in those product-oriented


organizations focus their energy on making
good products and improving them over time.
THE SELLING CONCEPT

 The selling concept holds that


consumers, if left alone, will ordinarily
not buy enough of the organization’s
products.

 The organization must therefore


undertake an aggressive selling and
promotion effort.
THE MARKETING CONCEPT

 The Marketing concept holds that the

key to achieving organizational goals


consists in determining the needs and
wants of target markets and delivering
the desired satisfactions more effectively
and efficiency than competitors.
MARKETING TERMINOLOGIES
(COMMONLY USED)

 Human Needs

 Wants

 Demand, and

 Product
A HUMAN NEED

 Is a state of felt deprivation of some basic

satisfaction such as food, clothing, shelter,


safety, esteem, belonging, and a few other
things for survival.

 Note that these needs are not created by

their society and marketers, they are


biological requirements.
WANTS

 Are desire for specific satisfiers of these deeper

needs.
 An American needs food and wants a hamburger, needs

clothing and wants a Pierre Cardin suit, needs esteem


and buys a Cadillac.

 In other societies, these needs are satisfied differently.

People’s needs are few but their wants are many.


DEMAND

Are wants of specific products


and services that are backed up
by an ability and willingness to
buy them (purchasing power).
 Many people want a Mecedenz Benz or Land
cruiser station wagon (shangingi) but only a few
are able and willing to buy one.
 It is not only how many want your products and
services, more important, how many would be
willing and able to buy it.
PRODUCT

 Anything that can be offered to someone


to satisfy a need or want.
 The word “product” brings to mind a physical
object such as an automobile, a television set, a soft
drink, etc.
 We normally use expression products and services
to distinguish between physical objects and
intangible ones.
 We don't buy a car to look at but it supplies
transportation services and likewise for microwave
for cooking. Physical products are really vehicles that
deliver services to us.
PRODUCT POSITIONING
ATLAS
QUALITY/PRICE STRATEGIES
QUALITY/PRICE STRATEGIES
NINE PRICE/QUALITY
STRATEGIES
MARKETING MIX

 Is the set of marketing tools or elements

that the firm uses to pursue its


marketing objectives in the target
market.
THE 4 PS OF THE MARKETING
MIX

 Product

 Place

 Promotion

 Price
THE 4 PS OF THE MARKETING MIX -
PRODUCT

 Variety

 Design

 Quality

 Features (size, appearance,..)

 Brand name (e.g. Labels, crowns,…)

 Packaging

 Warranties

 Returns
THE 4 PS OF THE MARKETING MIX -
PLACE

 Location
 Assortments
 Channels of distributions (direct, retail,
wholesalers)
 Coverage
 Transportation
 Inventory (storages, warehouses)
THE 4 PS OF THE MARKETING MIX -
PROMOTION

 Sales promotion

 Advertising

 Public relations (publicity)

 Direct marketing

 Sales-force
THE 4 PS OF THE MARKETING MIX -
PRICE

 Price List

 Discounts

 Allowances

 Payment periods

 Credit terms
PRICING STRATEGIES

 Cost-plus method

 Competitors prices, and

 What the Market Will Bear Method


COST-PLUS METHOD

 Is achieved by adding a reasonable profit margin

(say 30%) to the final total product cost (i.e.


marketing cost, plus production cost, plus
administration cost, plus finance cost).

 The final product cost per unit is determined by

dividing the total product cost by the number of units

produced. To this figure you may add a profit margin


COMPETITORS PRICES

 This method compares your product with

others in the market and then, based on


your product’s quality and other
features, you may fix your price lower,
higher or the same as your competitors
WHAT THE MARKET WILL BEAR
METHOD

 This method is based on supply and


demand of the product;

 If is seller’s market set the price of the

product ‘higher’ and

 If is buyer’s market set the price of the

product ‘lower’
MARKETING PLAN
PREPARATION
Most marketing plans consists of Economic and
Marketing Analysis with following sections:
 Executive summary
 Current marketing situation
 Opportunities and issues analysis
 Objectives
 Marketing analysis
 Actions/programmes
 Projected profit and loss statement; and
 Controls
ECONOMIC ANALYSIS

Issues for considerations:


 What is the product?
 How does it compare in quality and price with its
competitors?
 Where will the business be located?
 What geographical areas will be covered by the
project?
 Within the market area, to whom will the business
sell its products? – characteristics and profiles

 Estimate how much of the product is currently being


sold?
MARKETING ANALYSIS

Issues for considerations include:


 Product Strategies such details as brand, label, packaging
and cost per product, etc.
 Channels of distribution (direct, retail, wholesaler)
 Promotion strategies (advertising, publicity, warehouses,
sales promotion); and
 Pricing strategies to consider cost-plus method and
competitors prices and what the consumers are willing to
pay for.
DECISION GUIDE ON MARKET
SHARE
FINANCE

Finance provides:
 The needed funds under the most
favourable terms, and
 Sees to it that the funds are effectively
used
RELATIONSHIP OF FINANCE WITH OTHER
BUSINESS FUNCTIONS
OPERATIONS FIRMS MAY NEED
CAPITAL FOR:
Fixed Asset
 Land
 Building
 Machinery and Equipment
 Furniture and Fixtures
Current Assets
 Accounts Receivable
 Supplies
 Finished Goods
 Work-in-Process
 Raw Materials
 Cash
Deferred charges
 Pre-Operating Costs
 Goodwill
 Patents
SOURCES OF FINANCE
Short-term financing
 Bank Credit/Overdrafts
 Trade Credit
 Instalment Credit
 Customer advances
Medium-term financing
 Lease/venture capital
 Issue of share/debentures
 Loans from banks/institutions
 other financial institutions
 Ploughing back of profits
Long-term financing
 Issue of shares
 Issue of debentures
 Loans from banks and other financial institutions
 Ploughing back of profits
INVESTMENT PLAN
INVESTMENT PLAN Total Equity Loan
(in Tshs)
ITEMS
A. FIXED INVESTMENT
1. Land
2. Building
3. Machinery & Equipment
4. Office Equipment
5. Transport Equipment
6. Others
Total Fixed Investment
B. PRE-OPERATING INVESTMENT
1. Business Plan Preparation
2. Licenses and Registration
3. Skills and management Training
4. Trial Production
5. Others
Total Pre-Operating Investment (POI)
C. TOTAL INVESTMENTS (A + B)
INVESTMENT PLAN
DIRECT OPERATING COST

1. Raw Materials
2. Direct Labour Costs
3. Factory Overhead
Total Direct Operating Costs
INDIRECT OPERATING COSTS
1. Owner’s Salary
2. Salary for Marketing Staff
3. Salary for Production Staff
4. Salary for Admin. & Finance Staff
5. Selling & Marketing Costs
6. Office Supplies
7. Rentals
8. Other Expenses
Total Indirect Operating Costs (1)
TOTAL ANNUAL OPERATING COSTS
WORKING CAPITAL REQUIRED
TOTAL PROJECT COST (C + D)
DEBT TO EQUITY SHARE (%)

(1) NOTE that this Indirect Operating


Costs Still needs depreciation and POI
amortization
INVESTMENT PLAN (EXAMPLE OF
FILLING/SERVICE STATION)
(IN TSHS)
THANKS
END OF LECTURE

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