Marketing Masters Blog
Using the Art of Leverage to Take Control of Your Future

Many people think of marketing as advertising. This is a huge mistake and not understanding the fundamentals of marketing and its components can lead to a tremendous waste of time, effort and resources (ie. Money).

Let’s start with the components, the “Four P’s of Marketing”

1.Price

• Price impacts revenue, Price*Quantity
• Price Level impacts demand, Higher prices=Lower demand, Relative prices with competitors effects demand.

2. Product

• Physical features of the product, specifications, and the intangible aspects of the service (warranty)
• Things you do to make the product more attractive to buy (ie. packaging)
• Value: What is the ratio of benefit to cost for the consumer?
• Differentiation: Are the things that make your product unique real or psychological?

3. Place

• Where will you sell the product?
• Where are the customers and how do you reach them?
• Channels of Distribution: All the middle-men used to deliver your product.

4. Promotion

• Delivering your message to consumers.
• What most people think of as “Marketing”
• 3 purposes: Inform, Persuade, Remind
• Identify target audience
• Determine communication objective
• Design message
• Select communication channel
• Manage implementation
• Mass Selling, Advertising: which you pay for and Publicity: which is free
• Sales Promotion: In store effoerts to get the customer to try the product (ie. contests, coupons, free samples…etc)
• Personal Selling: Direct contact with a potential customer.

Once again I leave this as sort of a “Bare-Bones” post becuase I want you to think about this stuff and how it all works together. If there are any areas you would like me to describe in detail, let me know and I will post a follow-up on this subject.

Well, the answer is not that easy, so lets just think about one part of it.

There is a group of business people out there known as Stock Promoters. It is their job to help publicly traded companies with little to no volume on their stocks gain attention in the trading world.

I bet you are already thinking that this can go two ways (at least) right? So let’s think about it.

When a Stock Promoter is hired to help a company market it’s stock to traders and investors who’s best interest is in mind? We would like to think both right? May be the company is quietly increasing its net worth and its profitability ratios are outstanding and its management is top notch…etc. In this case its to the benefit of both the investor and the company. Obviously this company was just not on the right persons radar and never got noticed.

On the other hand, what if the company is not so hot? What if the company ‘knows’ it too. but they hire a Stock Promoter anyways and instead of helping a company get deserved recognition, he/she is pumping ill-deserved hype into the market for a company in which no one in their right mind should invest. This hype drives the price unrealistically high and it inevitably falls, and hard.

So, there are just two of the many dilemmas faced when looking at a stock that is being promoted by a  Stock Promoter. It all comes down to personal research, some marketers are out there to do good and some are out to make a buck just like every other  industry. Do your research and you won’t get burned.

This was a short post because I wanted to leave a lot to the imagination. If you are a marketer, think about the different ways there are to promote a stock. If you are an investor/trader do the same, but with a Caveat Emptor attitude.

I’d love to hear the thoughts of my readers, please leave a comment if you have any stories to share on this subject.

If you are thinking of starting a business, the first thing you need to do is figure out if it will be viable.

So how do you decide if your business will succeed?

Step 1: Study the market in which you will be entering.

• Find the market price for comparable products.
• Find the average volume of sales for a comparably sized business in your market.

Let’s first talk about lending. Most likely when starting a business you will have to obtain start-up capital from a lender. One of the first things potential lenders are going to ask is if you have done a Break-Even Analysis. That is how you can prove to your potential lender that you will be able to pay back the money borrowed and this one is easy.

Once you have studied your market and found the average selling price (SP) and the average volume you are on your way. The other informatin you will need is your Fixed Costs (FC) and Variable costs (VC). Variable costs are costs that change with the number of units produced.

Lest’s say you determine that your FC will be $10,000, your variable costs are $5 per unit, and the SP is about $10. How many units will you have to sell in order to Break Even? Here we go…

The Break Even Quantity (BEQ) is found where your Total Costs (TC) are equal to your Total Revenue (TR). Total Revenue is found by multiplying the SP by the number of units sold. In this case we will use the avgerage volume of sales, since that is a realistic number. Let’s say you determine that the average volume of sales for your product is 2,000 units per 2 months.

your BEQ => FC+(VC/Unit)= Selling Price/Unit => $10,000 + 5(U) = SP(U)

After a little algebra, this gives us a break Even Quantity of 2,000 units. So, it looks like we can break even in this business in 2 months.

But, you need money to live on too, lets say you know you will need $25,000 over the next 6 months. So, let’s add in a $25,000 Profit Goal (PG). How do we determine how many units to sell now?

Well, first we ned to determine your contribution. Contribution is found by subtracting the variable cost per unit from the selling price per uinit. SP-VC=Contribution => $10-$5 = $5 Contribution.

Now that we have the contribution, we can find your Adjusted Break Even Quantity.

(FC+PG)/Contribution = Adjusted BEQ => ($10,000+$25,000)/5 = 7,000 Units.

Can you sell 7,000 units in 6 moths based on your market research?

I hope you enjoyed this post and found it useful, if you have any comments or questions please post them and I will be glad to help.

When you choose to click that “Follow” link do you do it randomly? Or do you only follow people you actually know? Maybe somewhere in between? It seems like some are out there to get as many followers as possible and then bombard their followers with advertisements and selfless plugs. Is this you?

Twitter is a great place to network not just for business, but for fun. There is so much more to Twitter than posting your thoughts, it’s there so you can see the thoughts of others too. Twitter helps people from all over the word answer that one question all friends ask each other, “What are you doing?”. It’s a simple question, but to those who take an interest in your life it can really mean a lot to be able to keep up with you and what you are up to. Through Twitter, you can easily make new friends and develop relationships if you just put in a little effort. I love meeting new people and I try to follow everyone who is following me, with the occasional exception of “that guy” (see this post by @johnChowDotCom) to see what others think. Twitter is doing a pretty good job of dealing with those shady fellows.

I have my own system through which I choose my new twitter friends. But how do you do it? I think there are a lot of equally good ideas on how to choose your Twitter friends and I’d love to hear them, Just post a quick comment and tell me how you follow.