Slide 1:Think Marketing !


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Slide 3:Contents Marketing Mix and Key Marketing Activities Developing Market Segmentation Product Planning and Development Promotion Mix : Advertising, Publicity, Personal Selling and Sales Promotion Distribution Planning and Pricing Strategy


Slide 4:Marketing Mix and Market Segmentation


Slide 5:Marketing Credo There is only one valid definition of business purpose : to create a customer Peter Drucker


Slide 6:Marketing Mix Product Price Place Promotion Target Market


Slide 7:Key Marketing Activities Consumer Analysis Product Planning Price Planning Distribution Planning Promotion Planning


Slide 8:Key Marketing Activities Consumer Analysis Product Planning Examination and evaluation of consumer characteristics, needs, and purchase processes Development and maintenance of products, product assortments, product positions, brands, packaging, options, and deletion of old products Price Planning Outlines price ranges and levels, pricing techniques purchase terms, price adjustments, and the use of price as an active or passive factor


Slide 9:Key Marketing Activities Distribution Planning Establishment of channel relations, physical distribution, inventory management, warehousing, transportation, allocation of goods, and wholesaling Promotion Planning Combination of advertising, publicity, personal selling, and sales promotion to drive sales revenue


Slide 10:Product/Market Matrix Existing Products New Products Existing Markets New Markets Market Penetration Market Development Product Development Diversification


Slide 11:Product/Market Matrix Market Penetration Market Development The firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share Effective when the market is growing or not yet saturated The firm seeks growth by targeting its existing products to new market segments Effective when a local or regional business looks to wider its market, new market segments are emerging due to changes in consumer life-style/demographics, and innovative uses are discovered for a mature product


Slide 12:Product/Market Matrix Product Development Diversification The firms develops new products targeted to its existing market segments Effective when the firm has a core of strong brands The firm seeks growth by targeting its existing products to new market segments Diversification is utilized so that the firm does not become overly depend­ent on one product line


Slide 13:Market Segmentation The division of a market into different homogeneous groups of consumers Market Segment Should be: measurable accessible by communication and distribution channels different in its response to a marketing mix durable (not changing too quickly) substantial enough to be profitable


Slide 14:Types of Market Segmentation Geographic Demographic Based on regional variables such as region, climate, population density, and population growth rate. Based on variables such as age, gender, ethnicity, education, occupation, income, and family status


Slide 15:Types of Market Segmentation Psychographic Behavioral Based on variables such as values, attitudes, and lifestyle Based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought


Slide 16:Step in Planning A Segmentation Strategy Determining characteristics and needs of consumers for the product category of the company Analyzing consumer similarities and differences Developing consumer group profiles Selecting consumer segment (s) Positioning company’s offering in relation to competition. Establishing an appropriate marketing plan


Slide 17:Product Planning and Development


Slide 18:Products : Types of Goods Types of Goods Convenience Goods Shopping Goods Specialty Goods


Slide 19:Convenience Goods Convenience Goods Those purchased with a minimum of effort, because the buyer has knowledge of product characteristics prior to shopping The consumer does not want to search for additional information (because the item has been bought before) and will accept a substitute rather than have to frequent more than one store


Slide 20:Convenience Goods Staples are low-priced items that are routinely purchased on a regular basis, such as detergent, milk, and cereal Impulse goods are items that the consumer does not plan to buy on a specific trip to a store, such as candy, a magazine, and ice cream Emergency goods are items purchased out of urgent need, such as an umbrella during a rainstorm, a tire to replace a flat, or aspirin for a headache Convenience Goods


Slide 21:Shopping Goods Shopping Goods Those for which consumers lack sufficient information about product alternatives and their attributes, and therefore must acquire further knowledge in order to make a purchase decision


Slide 22:Shopping Goods Shopping Goods For attribute-based shopping goods, consumers get information about and then evaluate product features, warranty, performance, options, and other factors. The goods with the best combination of attributes is purchased. Sony electronics and Calvin Klein clothes are marketed as attribute-based shopping goods For price-based shopping goods, consumers judge product attributes to be similar and look around for the least expensive item/store


Slide 23:Specialty Goods Specialty Goods Those to which consumers are brand loyal. They are fully aware of these products and their attributes prior to making a purchase decision. They are willing to make a significant purchase effort to acquire the brand desired and will pay a higher price than competitive products, if necessary. For specialty goods, consumers will not make purchases if their brand is not available. Substitutes are not acceptable.


Slide 24:Services Type of Services Rented- goods Service Owned-goods service Non-goods


Slide 25:Services Rented- goods Service Owned-goods service Non-goods Involves the leasing of a good for a specified period of time. Examples include car, hotel room, apartment, and tuxedo rentals Involves an alteration or repair of a good owned by the consumer. Examples include repair services (such as automobile, watch, and plumbing), lawn care, car wash, haircut, and dry cleaning Provides personal service on the pan of the seller; it does not involve a goods. Examples include accounting, legal, and consulting services


Slide 26:Characteristics of Services The intangible nature of many services makes the consumer's choice more diffi­cult than with goods The producer and his or her services are often inseparable The perishability of services prevents storage and increases risks Service quality may be variable


Slide 27:Product Life Cycle Introduction Growth Maturity Decline


Slide 28:Product Life Cycle


Slide 29:Product Life Cycle


Slide 30:New Product Planning Idea Generation Product Screening Concept Testing Business Analysis Product Development Test Marketing Commercial-ization


Slide 31:New Product Planning Idea Generation A continuous, systematic search for new product opportunities It involves delineating sources of new ideas and methods for generating them Product Screening After the firm identifies potential products, it must screen them Many companies use a new-product screening checklist for preliminary evaluation


Slide 32:Screening Checklist


Slide 33:New Product Planning Concept Testing Business Analysis Concept testing presents the consumer with a proposed product and measures attitudes and intentions at this early stage of development Concept testing is a quick and inexpensive way of measuring consumer enthusiasm Business analysis for the remaining product concepts is much more detailed than product screening Because the next step is expensive and time-consuming product development, critical use of business analysis is essential to eliminate marginal items


Slide 34:Business Analysis Variables


Slide 35:New Product Planning Product Development Test Marketing Product development converts a product idea into a physical form and identifies a basic marketing strategy It involves product construction, packaging, branding, product positioning, and attitude and usage testing. Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan. The purpose is to evaluate the product and pretest marketing efforts in a real setting prior to a full-scale introduction


Slide 36:New Product Planning Commercial-ization After testing is completed, the firm is ready to introduce the product to its full target market. This is commercialization and corresponds to the introductory stage of the product life cycle Commercialization involves implementing a total marketing plan and full production


Slide 37:Promotion Mix : Advertising, Publicity, Personal Selling and Sales Promotion


Slide 38:Promotion Mix Advertising Publicity Personal Selling Sales Promotion Target Market


Slide 39:Promotion Mix


Slide 40:Four Key Steps to Advertise Determine message content and devise an ad Specify the location of an ad (media placement) Outline a promotion schedule Choose how many variations of a basic message to utilize


Slide 41:Things to Consider in Advertising Waste Reach Waste is the portion of an audience that is not in a firm's target market. Because media appeal to mass audiences, waste is a significant factor in advertising. Reach refers to the number of viewers or readers in the audience


Slide 42:Things to Consider in Advertising Frequency Message permanence Frequency is how often a medium can be used. It is greatest for newspapers, radio, and television, where ads may appear daily and advertising strategy may be easily changed Message permanence refers to the number of exposures one advertisement gener­ates and how long it remains with the audience


Slide 43:Things to Consider in Advertising Persuasive impact Clutter Persuasive impact is the ability of a medium to stimulate consumers. Television often has the highest persuasive impact because it is able to combine audio, video, color, animation, and other appeals. Clutter involves the number of ads that are contained in a single program, issue, etc. of a medium. Clutter is low when a limited number of ads is presented and high when many ads are presented.


Slide 44:Publicity : Poor and Good Response


Slide 45:Developing a Publicity Plan Setting objectives Outlining types of publicity Selecting media Creating publicity messages Timing publicity messages


Slide 46:Publicity Type


Slide 47:Specific Personal Selling Objectives


Slide 48:Personal Selling Process Prospecting (blind, lead) Approach Customer Wants Sales Presentation Answering Questions (questions and objections) Close Follow up (satisfaction, referrals, repurchase)


Slide 49:Types of Sales Promotion


Slide 50:Types of Sales Promotion


Slide 51:Sales Promotion Advantages It helps attract customer traffic and maintain brand or store loyalty Quick results can be achieved Some forms of sales promotion (calendars, t-shirts. Pens, etc) provide value to the consumer and are retained by them; and these forms can provide a reminder function Impulse purchases can be increased through in-store displays


Slide 52:Sales Promotion Disadvantages The image of the firm may be lessened if it continuously runs promotions. Consumers may view discounts as representing a decline in product quality and believe the firm could not sell its offerings without them. When coupons, rebates, or other special deals are used frequently, consumers may not make purchases if the items are sold at regular prices. Instead, they will stock up each time there is a promotion.


Slide 53:Sales Promotion Disadvantages Sometimes sales promotions shift the focus away from the product onto secondary factors. Consumers may be attracted by calendars, coupons, or sweepstakes instead of by product quality, functions, and durability. In the short run this generates consumer enthusiasm. In the long run this may have adverse effects on a brand's image and on sales, because a product-related differential advantage has not been developed.


Slide 54:Distribution Planning and Pricing Strategy


Slide 55:Distribution Planning Distribution planning is systematic decision making regarding the physical movement and transfer of ownership of a product from producer to consumer. It includes transportation, storage, and customer transactions. Distribution functions are carried out through a channel of distribution, which is comprised of all the organizations or people involved in the process. These organizations or people are known as channel members or middlemen.


Slide 56:Intensity of Channel Coverage


Slide 57:Intensity of Channel Coverage


Slide 58:Methods of Channel Cooperation


Slide 59:Pushing and Pulling Strategy Manufacturer Channel members Consumers Manufacturer Channel members Consumers Pushing Strategy Pulling Strategy


Slide 60:Price Planning A Price Represents the value of a good or service for both the seller and the buyer Price Planning Systematic decision making by an organization regarding all aspects of pricing


Slide 61:Factors Affecting Pricing Decisions Consumers Competitors Channel Members Government Cost Total Effects on Price Decisions


Slide 62:Consumers and Price Decisions Consumers The relationship between price and consumer purchases and perceptions is explained by two economic principles — the law of demand and price elasticity of demand The law of demand states that consumers usually purchase more units at a low price than at a high price The price elasticity of demand defines the sensitivity of buyers to price changes in terms of the quantities they will purchase


Slide 63:Elastic Demand Elastic demand occurs if relatively small changes in price result in large changes in quantity demanded Numerically, price elasticity is greater than 1 With elastic demand, total revenue goes up when prices are decreased and goes down when prices rise Inelastic demand takes place if price changes have little impact on quantity demanded Price elasticity is less than 1 With inelastic demand, total revenue goes up when prices are raised and goes down when prices decline In-elastic Demand Consumers and Price Decisions


Slide 64:Unitary Demand Unitary demand exists if changes in price are exactly offset by changes in quantity demanded, so that total sales revenue remains constant. Price elasticity is 1 Consumers and Price Decisions


Slide 65:Competitors and Price Decisions Competitors Another element contributing to the degree of control a firm has over prices is the competitive environment within which it operates


Slide 66:Market-controlled price environment Characterized by a high level of com­petition, similar goods and services, and little control over price by individual companies Characterized by moderate competi­tion, well-differentiated goods and services, and strong control over price by individual firms Company-controlled priced environment Competitors and Price Decisions


Slide 67:Government-controlled price environment Characterized by prices set by the government. Examples are public utilities, buses, taxis, and state universities Competitors and Price Decisions


Slide 68:Channel Members and Price Decisions Channel Members A wholesaler or retailer can gain stronger control over price by stressing its importance as a customer to the manufacturer, refusing to carry unprofitable product, stocking competitive items, and developing strong dealer brands so that consumers are loyal to the seller and not the manufacturer Sometimes retailers engage in selling against the brand, whereby they stock merchandise, place high prices on it, and then sell other brands for lower prices. This is often done to increase the sales of their own brands


Slide 69:Channel Members and Price Decisions Channel Members To ensure channel member cooperation with price decisions, the manufacturer needs to consider four factors: channel member profit margins, price guarantees, special deals, and the impact of price increases


Slide 70:Government and Price Decisions Government Price fixing regulations Prohibitions against price discrimination among channel members Unfair sales acts : predatory pricing


Slide 71:Cost and Price Decisions Cost Cost of raw materials and supplies Labor cost Advertising Cost Distribution Cost Pricing Decisions


Slide 72:Price Strategy Cost-based Price Strategy Demand-based Price Strategy Competition-based Price Strategy Price Strategy


Slide 73:Price Strategy Cost-based Price Strategy Demand-based Price Strategy With a cost-based price strategy, the marketer sets prices by computing merchandise, service, and overhead costs, and then adding the desired profit to these figures The marketer sets prices after researching con­sumer desires and ascertaining the range of prices acceptable to the target market


Slide 74:Price Strategy Competition-based Price Strategy The marketer sets prices in accordance with competitors Prices may be below the market, at the market, or above the mar­ket, depending on customer loyalty, services provided, image, real or perceived differences between brands or stores, and the competitive environment


Slide 75:Reference/Recommended Further Reading Joel Evans and Barry Berman, Marketing in The 21st Century, Prentice Hall. You can obtain this excellent book at this link: http://www.amazon.com/Marketing-21st-Century-Ninth/dp/159260143X/ref=sr_1_1?ie=UTF8&s=books&qid=1219802238&sr=1-1


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