Marketing week 7 8 9_10

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  • Marketing week 7 8 9_10

    1. 1. Promotion & Communication Jon Kitto [email_address]
    2. 2. Hierarchy-of-effects models Table 3.1  Hierarchy-of-effects models Based on: Barry, T.E. and Howard, D.J. (1990), ‘A Review and Critique of the Hierarchy of Effects in Advertising’, International Journal of Advertising , 9, 121–35.
    3. 3. Purchase Decision
    4. 5. Communication Process N O I S E Encoding Message Decoding Receiver Media http://www.youtube.com/watch?v=YV8zGNe7Ebg http://www.youtube.com/watch?v=F8nQyPNuA5I Sender Response Feedback
    5. 6. Purpose of Communication <ul><li>Differentiate </li></ul><ul><ul><li>http://www.youtube.com/watch?v=ib-Qiyklq-Q </li></ul></ul><ul><ul><li>http://www.youtube.com/watch?v=po0jY4WvCIc </li></ul></ul><ul><li>Remind </li></ul><ul><ul><li>http://www.youtube.com/watch?v=HT3lWeJ1GT0 </li></ul></ul><ul><li>Inform </li></ul><ul><ul><li>http://www.youtube.com/watch?v=uNcQaQZV67A </li></ul></ul><ul><li>Persuade </li></ul><ul><ul><li>http://www.youtube.com/watch?v=at1y7iHmjXQ </li></ul></ul>
    6. 7. Advertising <ul><li>“ Non- personal paid for communications targeted through mass media with the purpose of achieving set objectives such as creating awareness or encouraging trial. It is a means of reaching large audiences in a cost effective manner” </li></ul>
    7. 8. Sales Promotion <ul><li>Offers buyers additional inducement to buy </li></ul><ul><li>Can be targeted at consumers, intermediaries and the sales force </li></ul><ul><li>Reach new customers </li></ul><ul><li>Reduce distributor risk </li></ul><ul><li>Reward behaviour </li></ul><ul><li>Retention </li></ul><ul><li>Assist segmentation </li></ul><ul><li>Improve efficiency </li></ul>
    8. 9. Public Relations <ul><li>Attempts to shape attitudes and opinions </li></ul><ul><li>Used to communicate with all stakeholders </li></ul><ul><li>Useful in profile strategy </li></ul><ul><li>Used in crisis management </li></ul>
    9. 10. Personal Selling <ul><li>Involves face to face dialogue </li></ul><ul><li>Gives flexibility of message </li></ul><ul><li>Immediate feedback gained </li></ul><ul><li>Very useful in business to business markets </li></ul><ul><li>Very useful when products and services are complex </li></ul>
    10. 11. Direct marketing <ul><li>Used to create a personal dialogue with customers and stakeholders (not through an intermediary) </li></ul><ul><li>Widely used </li></ul><ul><li>Technology enabled </li></ul>
    11. 12. More Profits, More Investment Identify Prospects Target Media Sell Products Get Customer Information Build Database & Analyse Talk to Customers Regularly Cross-sell, Up-sell Renewal Increase Customer Lifetime Value Analyse Database Spiral of Prosperity
    12. 14. Perceptual Mapping
    13. 15. More Perceptual Mapping
    14. 16. 4 Cs Framework <ul><li>Communications </li></ul><ul><ul><li>Deliver a Personal Message </li></ul></ul><ul><ul><li>Reach a Large Audience </li></ul></ul><ul><ul><li>Level of Interaction </li></ul></ul><ul><li>Credibility </li></ul><ul><li>Cost </li></ul><ul><ul><li>Absolute Cost </li></ul></ul><ul><ul><li>Cost per Contact </li></ul></ul><ul><ul><li>Wastage </li></ul></ul><ul><ul><li>Size of Investment </li></ul></ul><ul><li>Control </li></ul><ul><ul><li>Ability to Target </li></ul></ul><ul><ul><li>Flexibility </li></ul></ul>
    15. 17. Price Jon Kitto [email_address]
    16. 18. Factors affecting pricing decisions Pricing decisions Internal factors - Marketing objectives Marketing mix Costs Organisation for pricing External factors - Nature of market & demand Competition Other environmental factors
    17. 19. General Pricing Approaches <ul><li>Cost-plus pricing </li></ul><ul><ul><li>Break-even analysis & target profit pricing </li></ul></ul><ul><li>Value-based pricing </li></ul><ul><li>Going-rate pricing </li></ul><ul><ul><li>Sealed-bid pricing </li></ul></ul>
    18. 20. Breakeven Chart Sales Breakeven Point Fixed Costs Variable Costs Total Costs £ Units
    19. 23. New Product Pricing Strategies <ul><li>Market-skimming </li></ul><ul><li>High price charged </li></ul><ul><li>‘ Just’ worthwhile for some segments to adopt new product </li></ul><ul><li>As competitors enter market, price is lowered </li></ul><ul><li>Market-penetration </li></ul><ul><li>Low initial price charged </li></ul><ul><li>Attract large volume sales quickly </li></ul><ul><li>Large market share </li></ul><ul><li>High volume sales save costs </li></ul><ul><li>Economies of scale on production and distribution </li></ul>
    20. 24. Product Mix Pricing Strategies <ul><li>Product-line pricing </li></ul><ul><ul><li>setting price steps between products in a product line </li></ul></ul><ul><li>Optional product pricing </li></ul><ul><ul><li>accessory products sold with main product </li></ul></ul><ul><li>Captive product pricing </li></ul><ul><ul><li>product must be used with a main product </li></ul></ul><ul><li>By-product pricing </li></ul><ul><ul><li>products produced as part of the process involved in producing another product </li></ul></ul><ul><li>Product-bundle pricing </li></ul><ul><ul><li>combining several products and setting a discounted price </li></ul></ul>
    21. 25. Nature Of Marketing Channels <ul><li>Channel of Distribution </li></ul><ul><ul><li>A group of individuals and organisations that direct the flow of products from producers to customers </li></ul></ul><ul><li>Marketing Intermediary </li></ul><ul><ul><li>A middleman who links producers to other middlemen or to those who ultimately use the product. </li></ul></ul><ul><ul><li>Two main types: </li></ul></ul><ul><ul><ul><li>Merchants </li></ul></ul></ul><ul><ul><ul><li>Functional middlemen </li></ul></ul></ul>
    22. 26. Channel design decisions <ul><li>Analyse customer service needs - marketing channels deliver appropriate value to the customer </li></ul><ul><li>Defining channel objectives and constraints - which segments to serve and which channel to use for each </li></ul><ul><li>Identifying key channel alternatives - direct marketing, broker, agent, intermediary, wholesaler, retailer, e-commerce </li></ul><ul><li>Evaluating alternatives - economic, control, level of flexibility criteria </li></ul>
    23. 27. Channel For Consumer Products Producer Agents or Brokers Wholesalers Retailers Consumers
    24. 28. Channel For Industrial Products Producer Agents Industrial Distributors Industrial DMUs
    25. 29. Channel Integration (Dibb, Simkin, Pride & Ferrell 2000) <ul><li>Vertical </li></ul><ul><li>The combination </li></ul><ul><li>of two or more </li></ul><ul><li>stages of the </li></ul><ul><li>channel under </li></ul><ul><li>one management </li></ul><ul><li>Horizontal </li></ul><ul><li>The combination of institutions at the same level of channel operation under one management </li></ul>
    26. 30. Supply chain Suppliers Procurement- Manufacturing - Physical distribution Channels Customers
    27. 32. Major Logistics Functions - Outsourcing <ul><li>Order processing </li></ul><ul><li>Warehousing </li></ul><ul><li>Inventory </li></ul><ul><li>Transportation </li></ul><ul><li>Others </li></ul>
    28. 34. Services Jon Kitto
    29. 35. Business Week said… <ul><li>Ask most executives how innovation can spur their growth, and they'll immediately think about changes in their product lineup. Wrong. They should be thinking &quot;services.&quot; </li></ul><ul><li>As a percentage of GDP today, services comprise 82% of our economic output. The number has been increasing for years. The crossover point from products to services actually happened in 1987. Yet when we think of innovation, most of us are still thinking products -- iPods, Mini Coopers, Treo's, and the like still dominate our mindshare about what's cool. </li></ul>
    30. 36. We are what we do… Not what we own… (Live Work) <ul><li>Intangible </li></ul><ul><ul><li>Cannot be owned </li></ul></ul><ul><li>Perishable </li></ul><ul><ul><li>Cannot be stocked </li></ul></ul><ul><li>Variable </li></ul><ul><ul><li>Can be customised </li></ul></ul><ul><li>Inseparable </li></ul><ul><ul><li>From the people who produce them </li></ul></ul>
    31. 37. The extended marketing mix <ul><li>The additional elements deal with the characteristics of services </li></ul><ul><li>People </li></ul><ul><ul><li>good training for service staff, appearance of staff, staff carefully selected, and held more accountable </li></ul></ul><ul><li>Process </li></ul><ul><ul><li>fast service tills, part time staff to cover highest periods of demand, easy booking systems for appointments, on-line </li></ul></ul><ul><li>Physical evidence </li></ul><ul><ul><li>internal and external appearance of premises, short queues, modern equipment, pleasant waiting areas, add-ons, extras </li></ul></ul>Product Price Promotion Place
    32. 38. SERVQUAL
    33. 39. Determinants of perceived service quality Dimensions of quality Access Credibility Knowledge Reliability Security Competence Communication Courtesy Responsiveness Tangibles Word of Past Buyers’ Advertising mouth experience needs Expected service Perceived service Perceived service quality
    34. 40. International Jon Kitto
    35. 41. The trend towards globalisation Domestic markets Infrequent foreign marketing Regular foreign marketing International marketing Global marketing
    36. 42. Factors for consideration <ul><li>Language </li></ul><ul><li>Culture & tradition </li></ul><ul><li>Legal & regulatory requirements </li></ul><ul><li>Buying habits and motivational factors </li></ul><ul><li>Standards of living </li></ul><ul><li>Media availability and usage </li></ul><ul><li>The competitive environment </li></ul>
    37. 43. Structural Choices <ul><li>Exporting - sending products abroad and selling through intermediaries or own sales representatives </li></ul><ul><li>Licensing - form of joint venture, licensing the right to a local firm to use a process, trademark, etc for a fee or royalty </li></ul><ul><li>Joint ventures - joining with local firm to produce or market a product </li></ul><ul><li>Direct ownership - entering foreign market by developing manufacturing facilities </li></ul>
    38. 44. International Marketing Mix <ul><li>Arguments for </li></ul><ul><li>Adaptation </li></ul><ul><li>Differing customer needs </li></ul><ul><li>Infrastructure variations </li></ul><ul><li>Varying levels of education </li></ul><ul><li>Economic, cultural and political conditions vary </li></ul><ul><li>Inconsistent local management experience, abilities and skills </li></ul><ul><li>Arguments for </li></ul><ul><li>Standardisation </li></ul><ul><li>Larger number of buyer similarities </li></ul><ul><li>Easier to control campaigns from central source </li></ul><ul><li>Technological advances allow a consistent brand image to be maintained </li></ul><ul><li>Economies of scale </li></ul>
    39. 45. Business-to-Business
    40. 46. Decision Making Unit (DMU) <ul><li>User - end user, may initiate request and help specify </li></ul><ul><li>Influencer - technical personnel or specialists, help specify, provide information </li></ul><ul><li>Buyer - formal authority holders, help specify, select vendors, negotiate </li></ul><ul><li>Decider - final approver (often also buyer) </li></ul><ul><li>Gatekeeper - control information flow to others, can prevent sales people gaining access </li></ul>
    41. 47. Types of buying decision <ul><li>Straight re-buy - goods re-ordered without modification </li></ul><ul><li>Modified re-buy - opportunity for competitors to enter discussions, essential service quality is good </li></ul><ul><li>New buy - greater risk or cost, the fuller decision making unit involved </li></ul>
    42. 48. Factors influencing industrial buying behaviour ENVIRONMENTAL Levels of demand Economic prospects Interest rates The pace of technological change Political and legal structures Competitive structures ORGANISATIONAL Objectives Policies Structures Systems & degree of centralisation Processes and procedures Managerial attitudes to risk Financial l resource Previous experiences BUYING CENTRE Roles in DMU Group processes Interpersonal interactions INDIVIDUAL Personal objectives Job position Attitude to risk Previous experiences Technical knowledge Motivation BUYING DECISION SOURCE: Adapted from Webster and Wind, 1972

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