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  • MARKETING STRATEGY Strategic Marketing attempts to determine how an organization competes against its competition in a market place. In particular, it aims at generating a competitive advantage relative to its competition. Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived from them, as well as to satisfy the customer with prompt services and meeting the customer expectations. Operational Marketing includes the determination of the marketing mix (Product, Price, Place, Promotion).
  • One familiar way to think about marketing a product is through the four Ps of marketing or marketing mix . The four Ps are: Product : The product aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support. Pricing : This refers to the process of setting a price for a product, including discounts. The price need not be monetary - it can simply be what is exchanged for the product or service, e.g. time, or attention. Promotion : This includes advertising, sales promotion , PR, sales force and direct marketing , and refers to the various methods of promoting the product, brand, or company. Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place , referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. The four Ps model is most useful when marketing low value consumer products.
  • PRODUCT Product is not the thing itself but rather the total package of benefits obtained by customer. For marketing purpose, the product has to be considered from the point of view of value delivered to the customer. Value can be delivered simultaneously by a number of vehicles listed above.
  • A modern strategic approach of the product, is by considering how you might differentiate and position your promising product and how you might create a brand for it. Differentiation is the act of distinguishing your company's offering from competitors' offerings in ways that are meaningful to consumers. You can differentiate products physically or through the services your company provides in support of the product. The term positioning means determining and communicating the central benefit of the product in the minds of target buyers. For example, a newspaper publisher might target buyers for whom news reliability is a major concern. The company "positions" its newspaper as the most reliable news provider on the market. A product brand is a name, term, sign, symbol, or design—or any combination of these—that identifies the offering and differentiates it from those of competitors
  • You can differentiate products physically or through the services your company provides in support of the product. Products' physical distinctions include: Form: size, shape, physical structure; for example, aspirin coating and dosage Features: such as a word processing software's new text-editing tool Performance quality: the level at which the product's primary characteristics function Conformance quality: the degree to which all the units of the product perform equally Durability: the product's expected operating life under natural or stressful conditions Reliability: the probability that the product won't malfunction or fail Reparability: the ease with which the product can be fixed if it malfunctions Style: the product's look and feel Design: the way all the above qualities work together; (it's easy to use, looks nice, and lasts a long time) Products' service distinctions include: Ordering ease: how easy it is for customers to buy the product Delivery: how quickly and accurately the product is delivered Installation: how well the work is done to make the product useable in its intended location Customer training: whether your company offers to train customers in using the product Customer consulting: whether your company offers advising or research services to buyers of the product Maintenance and repair: how well your company helps customers keep the product in good working order
  • BRANDING A product brand is a name, term, sign, symbol, or design—or any combination of these—that identifies the offering and differentiates it from those of competitors. A well-executed brand creates a strong brand image —the consumer perception of what the product or company stands for. In customers' minds, brands can have meanings that take many different forms. For example, brands can evoke: Attributes: "This newspaper is reliable." Benefits: "With such a reliable newspaper, I do not need another source of information." Values: "This company certainly emphasizes high performance." Culture: "I like this newspaper because it reflects an organized, efficient, high-quality culture." Personality: "This newspaper really represent my organized, efficient side." User: "That looks like the kind of newspaper that a senior executive would buy." All companies strive to build a clear, favorable brand image for themselves and their products.
  • EXAMPLES For example, IBM “holds” the word COMPUTER. I.e. the brand’s name becomes the generic name for an entire category of products. Trying to transmit the same message as one of your competitor to your potential target is useless. For example, Volvo “reserved” the word SECURITY in people’s mind. Few others car producers (including Mercedes-Benz and General Motors) tried to develop marketing campaigns based on the same message, but none (except Volvo) did not succeed to transmit and impose the SECURITY message to potential customers. For example: “Joy – the most expensive perfume in the world”, “Listerine – The taste you hate twice a day”. Following the same marketing strategy as the market leader can’t be effective. Is best to find an opposite attribute that can bring you an advantage with respect to the leader. For example, for several years IBM dominated the computers’ market due to attributes like “big” and ”strong”. More than few IT companies tried to adopt the same attributes with no significant success. And then, a new company - Digital Equipment Corporation (now held by Compaq) adopted the “small” attribute, creating the first minicomputer. Nowadays minicomputers represent one of the biggest and most successful market.
  • PRODUCT LIFECYCLE Products have their own life cycles. That is, they're born, and then—over time—their sales grow, mature, and finally decline. The strategies with which you market a product need to change with each of these life-cycle phases. The slide above shows a few examples of how this might work.
  • One of the most powerful strategic moves that a company can overtake is launching new products and services. Why develop new products or services? The day-to-day personal and business life showed us that companies are always offering new products and services—whether it's a new camping backpack with handy features, an easier way to pay your bills electronically, or an innovative database-management tool. Consumers like to have new choices, and successful companies constantly research and create new products to satisfy these desires and to build sales. But continually coming up with new offerings is important for other reasons as well: Consumers are often fickle creatures—their attitudes toward existing products can change quickly and unexpectedly. Most products have a natural life cycle and eventually become outdated. Your competitors are also looking for ways to offer bigger and better deals to customers. In most businesses, companies are under pressure to constantly come up with either entirely fresh offerings or improvements on existing products.
  • What's the best way to make your new or improved product or service as successful as possible? Generate and test good ideas, then develop effective marketing programs for the most promising-sounding ones.
  • GENERATING NEW PRODUCTS IDEAS Start generating new product ideas by asking customers what they need and want, or what they're unhappy about. Good ideas don't always come from customers. Consumers may not be aware of the available product or service possibilities, or they may not know how to articulate their needs or concerns. Still, any product idea will succeed only if it ultimately solves a consumer problem, fulfills consumers' needs, or meets their approval. Other sources of new ideas include: Your competitors Your company's own employees Industry consultants and publications Market-research firms Consider using all these resources, in addition to customer feedback, to brainstorm as many ideas as possible.
  • TESTING YOUR IDEAS Once you've generated ideas for new offerings, determine whether the ideas are compatible with your company's overall strategies and resources. Screen out any ideas that don't fit these criteria. For example, if your firm specializes in financial press, ask how strongly an idea for a new economic weekly might support this strategy. And decide whether the company can afford to develop and launch such a product. If your new product ideas fit with your company's strategic plan, then test the product idea by presenting the concept to target consumers—perhaps in a focus group or through a mail-in questionnaire—and get their reactions and ideas. Depending on the product, you can create a physical model, or prototype, to show consumers. Or, you can use computer-aided design and manufacturing software to demonstrate the idea.
  • TEST-MARKETING NEW PRODUCT Once you've decided on a new product, the next step is to test it in the market. Test-marketing lets you gauge whether the product is technically and commercially sound and how enthusiastically target customers may embrace the product. You can test-market both consumer and business goods. First, develop samples of the actual product. You'll dress these samples up with a brand name and packaging and then test them in authentic settings, with flesh-and-blood customers. If your test-market results are positive—that is, it looks as if there's real interest in your product—you can feel more confident about actually commercializing the product—proceeding to manufacture and distribute it—all within your marketing plan.
  • TEST MARKETING CONSUMER GOODS To test consumer goods , you can use one or more of the methods above. They range from least to most costly, and your firm can hire companies that specialize in conducting and evaluating any or all of these tests.
  • TEST-MARKETING BUSINESS GOODS To test business goods , you can use the above methods. Alpha testing: Build a few units of the new product. Then carefully select a couple of your most important and friendliest customers to try the product for free and comment on its functionality, features, and problems. You might make sure that a representative from your firm accompanies the unit to the alpha-testing customer and "walks" them through the testing process. Your goal at this point is to collect loads of advice for making the product the best it can be. Beta testing: This resembles alpha testing, except that it's done a bit later in the product-development process—when the product is somewhat closer to its final form. With beta testing, send more units out to more customers for their feedback than you did with alpha testing. You might have a more specific list of concerns or issues that you want testers to think about as they use and experiment with the product. And, you might actually offer to sell testers the product at a big discount. Trade show exhibits: Observe how much interest participants show in the product, how they react to various features, and how many express clear intention of buying the product or placing an order for it. Note, though, that your competitors will also get a look at your product at trade shows. Therefore, it's best to launch the product soon after the show.
  • PRICING The price does not need to be monetary - it can simply be what is exchanged for the product or services, e.g. time, energy, psychology or attention.
  • PRICING The price is the only aspect of the marketing mix that generates revenue. All the other elements generate costs. That is why the companies try to increase their prices as much as possible. Companies must consider the price impact on the volume of sales. Enterprises try to increase revenues (the price influence the sales volume) and consequently, after decreasing costs, generate maximum profit.
  • PRICING Marketing strategy includes pricing strategies, expected volume, based on the analysis of the above variables. Is important to distinguish between listed price and the real price. Nowadays discounts are very popular, so the majority of the customers do not pay the initial price. They can be offered discounts, free products/services, gifts, etc. There are two ways of setting prices: 1. Setting prices with respect to costs. This type of price setting implies a higher initial price, in accordance to the estimated costs. This method is practiced especially when retailers want to ensure a solid final profit. 2. Setting prices with respect to product value. This type of price setting implies an estimation of the maximum price that a consumer is willing to pay for the product/service. The company will set as the product initial price a lower price than the estimated maximum value, to encourage consumption and increase the sales volume.
  • PRICING Companies that are able to transmit more value, style, innovation can and will propose higher prices. Consumers can be spit in three categories: Consumers very much aware of the price standards Consumers willing to pay more, but up to a limit, for better quality or better services Consumers that demand best quality and best services. Thus, when setting prices, the company must choose as a target one of the three categories of customers, and create a customized the products/services (including price) offer according to the target buying behavior.
  • MARKETING COMMUNICATION PLAN Marketing communications simply means that the marketer communicates to the target market about the availability, benefits, and price of the company's products. Marketing communications covers the whole range of what most people think of the term "marketing"— advertising, direct sales, sales promotions, public relations, direct marketing, and so on. Effective marketing communications occurs when the marketing plan is created by the marketing team in conjunction with the overall company strategic objectives and input from others in the company who are involved in the process of selling that product—whether as a salesperson or by producing, shipping, servicing, or accounting for the product. Any marketing communication plan will involve these steps: The marketing objectives must be clearly stated. The message needs to match the target markets' needs or demands. Implementation should be carefully planned. The results have to be evaluated.
  • ADVERTISING Advertising is one of the most powerful forms of "pull" marketing—persuading the customer to try a product and continue to use the product. It is a paid form of impersonal promotion that can appear in many venues: Print brochures or flyers Billboards Point-of-purchase ads Television and radio ads Website banners The strength of advertising lies in its ability to: Inform (give information to the consumer). Marketers use this form of advertising when trying to create awareness of a new product. Persuade (influence the consumer to buy). They use persuasive ads to focus on competitive advantages of a product. Remind (maintain consumer awareness). Marketers use reminder ads to keep an aging brand in the consumers' minds.
  • CREATE A PRINT AD Clarify the purpose of the ad. An ad's purpose drives its format and content. Get consumers' attention. Remember: the average consumer scans an ad in just four seconds. Make your ad as eye-catching as possible. State the product's or service's benefit for consumers. Your ad should clearly answer the consumer's basic question: "What's in it for me." Give consumers a reason to act now. Use language such as "Sale ends Saturday" to create a sense of urgency. Use ad copy to your advantage. The best copy has a conversational tone; appeals to consumers' interests or concerns; and is short, positive, clear, and complete. Use design to your advantage. The best designs are fresh, appealing, uncomplicated, uncluttered, and practical. The ad's look and feel should support and enhance the brand image and message. Follow useful type-treatment guidelines. Avoid using too many different type sizes and styles.
  • SALES PROMOTIONS Sales promotions are another form of "pull" marketing. In this case, marketers may send out coupons for product savings, contests, free trials, or cash refunds. A marketer may choose to use a sales promotion to introduce a new product, build brand loyalty, or gain entry into a new distribution or retail channel.
  • DESIGN SALES PROMOTION Use sales promotions with advertising. For example, combine a price promotion with an ad emphasizing the product's features or with a point-of-purchase display. Or if you're marketing to businesses through trade shows or conventions, combine poster ads with sales-rep selling contests to get the most impact. Be clear about your objectives. Your goals for sales promotions will vary with your target market. If you're targeting retailers, persuade them to carry your company's new offerings, to stock more inventory, to encourage off-season buying, or to offset competitive promotions. Choose the appropriate promotion tools. Depending on your objectives, select the right tools. For salespeople, launch sales contests—with prizes to the winners. If you're marketing to businesses through trade shows or conventions, use publications, videos, and other audiovisual materials to generate new sales leads, meet new customers face to face, sell more to existing customers, and educate customers. Use sales promotions in markets of high brand dissimilarity . Sales promotions tend to attract brand switchers who look primarily for low price, good value, or premiums. You'll get more—and longer-lasting—market share if you use such incentives in markets of high brand dissimilarity. Distinguish between price promotions and added-value promotions . Sales promotions, with their incessant prices off, coupons, deals, and premiums, can devalue the product offering in consumers' minds. Make sure your promotions enhance your brand image. Pretest your sales promotion program. Use pretests (small trial runs) to determine whether the promotional tools you've chosen are appropriate, the incentive size will produce enough sales response without costing the company too much, and the presentation is efficient.
  • DIRECT MARKETING "Push" marketing occurs when the product is "pushed" from the seller to the consumer. The most common type of push marketing is when a company uses a direct sales force to call on prospective companies or consumers. It is the salesperson's task to persuade the consumer to purchase the product. Salespeople are most effective for the following marketing (or selling) tasks: Looking for new prospects (people from whom a marketer is seeking a response—whether it's attention, a purchase, a vote, and so forth) Communicating face-to-face, so that customer questions and concerns can be directly addressed Selling, which consists of knocking on doors, presenting the product, and selling it Servicing, which entails providing services for customer such as repairing or replacing parts for a product Performing market research
  • EVALUATE SALES REPRESENTATIVES Analyze salespeople's annual territory marketing plans. This report puts sales reps into the role of marketing managers and profit centers. Managers can study these plans, make suggestions, and use the plans to develop sales quotas. Review other reporting documents from sales reps. Reports such as sales calls, expenses, new business, and lost business, can be used as raw data, from which you can extract key indicators of sales performance. Compare sales reps' current performance with their past performance and company averages. Assess performance along more subjective dimensions. For example, take stock of a sales rep's knowledge of the firm, products, customers, competitors, territory, and responsibilities. Gauge sales reps' professionalism. Determine whether a sales rep has a customer-oriented approach. Does he or she maintain a professional connection with the customer even after a sale? Assess negotiation skills. Effective salespeople need to work with customers to reach agreement on price and other terms of sales without making concessions that will hurt your company's profitability. Assess ability to build long-term relationships with customers. Effective sales reps demonstrate that their company has the desire and ability to serve a customers' needs in a superior way over the long run.
  • DIRECT MARKETING Companies engage in direct marketing when they sell their products and services directly to customers without the use of intermediaries such as wholesalers, retailers, etc. To do so, they can use traditional media, such as: Printed, mailed marketing pieces Radio TV Telemarketing Faxes And also use newer media, such as: E-mail Web sites Online services Direct marketing's most important benefit for companies is that it lets firms engage in relationship marketing , or one-to-one marketing . Through this special kind of marketing, companies build stronger, more profitable bonds with target customers.
  • Direct marketing has been growing so fast because it provides increased benefits in today's business world of intensifying competition. It enables companies to: Buy mailing lists containing the names and contact information of almost any group of target customers; for example, consulting companies, financial institutions, etc Personalize and customize the messages they deliver to target customers Time the delivery of messages so that they reach prospects at the right moment Achieve higher readership of printed materials Test messages and media to find the most cost-effective approach Conceal their offerings and strategy from competitors Measure customer responses to identify the most profitable campaigns Integrate direct-marketing strategies with other strategies, such as paid advertisements Reach customers less expensively than through a sales force Direct marketing's most important benefit for companies is that it lets firms engage in relationship marketing , or one-to-one marketing . Through this special kind of marketing, companies build stronger, more profitable bonds with target customers. Customers—whether individual consumers or businesses—also appreciate direct marketing for many different reasons. They can: Shop more easily and quickly from home or the office Choose from a larger selection of products Compare products, services, and prices easily Order goods 24 hours a day Learn about available products or services without tying up time meeting with salespeople Receive their purchases quickly through next-day delivery services
  • In addition, new technology has made it easier than ever for companies to compile customer databases , organized collections of updated, accessible information about individual customers or prospects. Your company's customer database lets it: Identify prospects: The company may generate sales leads by advertising its product and then build a database from the responses that come in. It can sort through the database to identify the best prospects and then contact them by mail, phone, or other means in an attempt to convert them into customers. Decide which customers should receive a particular offer: The firm defines the ideal target customer for an offer, then searches the database for those most closely resembling the ideal. Deepen customer loyalty: The company can pique customers' interest and enthusiasm by remembering their preferences and sending gifts, coupons, and special information. "Reactivate" customer purchases: Your firm can use automatic mailing programs to send customers birthday or anniversary cards, holiday shopping reminders, or other timely offers.
  • Direct marketers have a number of channels available to them. For example: Face-to-face selling: including individuals who sell products for direct-sales organizations Direct mail: including printed offers, announcements, reminders, or other messages sent directly to a person or business at a particular address; nonprinted items mailed to consumers, such as free video or audiotapes, CDs, and computer diskettes; faxes, e-mail, and voice-mail messages Catalogs: pamphlets or books describing the company's merchandise and containing order forms or toll-free ordering numbers Telemarketing: phone calls designed to attract new customers, contact existing ones, or take orders Direct-response TV: such as home-shopping channels and TV ads that invite viewers to call a toll-free number to get more information or place orders Kiosks: machines placed in stores, airports, and other locations that let allow customers to place orders With so many available channels, companies need a systematic approach to deciding which to use in their direct-marketing campaigns.
  • Direct marketing clearly offers crucial benefits to both sellers and buyers. But it can also have its dark side—characteristics that might serve to turn customers away from your product: Customer irritation: Many consumers view direct-marketing solicitations as annoying. Unfairness: Some unscrupulous direct marketers take advantage of impulsive buyers; for example, by using inflated claims to capture customers with low sales resistance. Outright deception and fraud: These include false claims about products and performance and questionable gimmicks such as envelopes that resemble government documents—which make recipients feel compelled to open and read the contents. Invasion of privacy: Critics worry that marketers know too much about customers' lives and may use this knowledge to take advantage. For online marketers, consumers are particularly worried about the security of their credit-card numbers and other personal information. Chaos and clutter: For online marketers, especially, the Internet makes a staggering amount of information possible. Navigating the Web can be frustrating for consumers, thus many companies' sites go unnoticed. These problems, if left untended, will ultimately turn customers away from direct marketing. Companies that realize this and work to address these issues—providing honest and well-designed marketing offers only to those consumers who appreciate being contacted—will ultimately be more successful.
  • ONLINE MARKETING Electronic communications of all sorts have shown explosive growth, with Internet traffic reaching more people each day and millions of Web sites already open for business—and more coming online every day. This new technology has taken several forms: The Internet: the international web of computer networks that makes global communication instantaneous and decentralized Electronic markets: individual companies' Web sites that (1) describe a firm's offerings, (2) let buyers search for information and place orders using a credit card, (3) arrange for delivery of the product physically (to the customer's home or office) or electronically (as in the case of software and music downloaded to the customer's computer) Electronic commerce: business transactions enacted over a wide variety of platforms, such as use of fax or e-mail, automated teller machines (ATMs), and "smart cards" that facilitate payment (such as for long-distance telephone service) Commercial online services: companies that offer online information and services such as news, entertainment, shopping advice, chat rooms, and e-mail capabilities to paid subscribers Direct marketing through both traditional and new media poses both new opportunities and new challenges for companies.
  • Several suggestions: Establish an electronic presence. Buy space on a commercial online service, sell products or services through another company's Web site, or open your own corporate Web site or "microsite" (a small, specialized site for specific occasions or products). Advertise online. Advertise in special sections offered by commercial online services; in Internet newsgroups set up for commercial purposes; or through banner ads and pop-up windows on other companies' Web sites. Participate in or sponsor Internet interest groups. These groups encourage the spread of "word of Web" about your products, and help you to learn how customers perceive your company and its offerings. Groups come in various forms: Forums are discussion groups located on commercial online services. These groups may operate a chat room (for real-time message exchanges), a classified-ad directory, and other resources. Newsgroups are the Internet version of forums, limited to people who post and read messages on a specific topic. Bulletin boards are specialized online services that center on a specific topic or group. Web communities are commercially sponsored Web sites where member companies congregate online and exchange views of common interest. Send e-mails. Send electronic newsletters, special product offers, reminders of upcoming promotions, and announcements for special events. Invite people to e-mail your firm with questions, suggestions, and complaints. To avoid being labeled as a "spammer" (a company that sends unsolicited e-mail), consider asking for customers' permission before sending e-mail offers.
  • Tips For Online Marketing Follow standards for online ads. If you decide to post an ad on the Internet, request ad requirements from the company that's selling the ad space before designing your ad. Use the Web as a direct-response tool. When designing a direct-response ad for the Web, make it easy for the respondent to reach you—through a click-on button, e-mail, phone, fax, and so on. Look for ad-space bargains. Consider hiring an ad agency or media-buying shop that can help you in your search. Don't forget to try to make a sale through a Web ad. Give consumers this option! Make your own Web site irresistible and easy to use. Don't forget basic spelling, punctuation, grammar, and editorial standards.
  • Google Advertising Platform Online advertising becomes more and more attractive for companies all over the world. Search Advertising (advertising through search engines) is one of the most effective and simple method of online advertising. Google – one of the most visited Internet websites and the most successful search engine available online - proposes an interesting advertising tool for all categories of websites. The service is called AdWords and is Google's flagship advertising product and main source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one title line and two content text lines. How it works? Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google's search engine on www.google.com, ads for relevant words are shown as "sponsored link" on the right side of the screen. The ordering of the paid listings depends on other advertisers' bids (pay for placement P4P) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates and the relevance of an advertiser's ad text, keyword, and landing page to the search, as determined by Google.
  • RELATIONSHIP MARKETING The combination of traditional direct-marketing media, such as mailings, radio spots, kiosks, and so forth; new media, including the Internet and e-mail; and recent database technologies has created a whole new approach to marketing. That approach is called relationship marketing , or one-to-one marketing . Through relationship marketing, firms learn more and more about their target customers—often by compiling powerful databases that keep track of buyers': Purchasing behavior and history Product preferences Concerns or complaints about the company's products or services Lifestyles Other personal characteristics, such as age, marital status, income level, race, and so forth that could affect buying decisions Using that information, companies can tailor their marketing communications to attract and maintain those customers. They can also customize their offerings to constantly meet target customers' changing needs.
  • Relationship marketing lets companies build strong, profitable bonds with their target customers. Organizations benefit from these bonds because loyal customers generate greater and greater profits every year they do business with a particular company. How? These customers buy more and more often from the company, and they tend to spend increasing amounts of money over time. At the same time, the costs associated with serving such customers —including entering them in the company's database, getting to know their preferences, and processing information about them—gets spread out over time. Thus that cost decreases with every purchase from a particular customer. Consumers also benefit from relationship marketing: By building bonds and accumulating a purchasing history with trusted companies, customers can avoid the time-consuming—and often stressful—process of shopping around for the best deal. Because these trusted companies know them, customers may hear about attractive products, services, or special offers that they would not have found out about from less familiar companies. Sometimes, companies may even suggest a product that a customer would not have thought of as attractive on his or her own. In other words, a company may sense a customer's need and identify ways to satisfy it even before the customer is aware of that need.
  • Though relationship marketing has enormous potential, it carries a serious risk as well: the danger of irritating consumers with overly frequent contact or requests for personal information. Consumers may refuse building one-on-one relationships for several reasons: They simply don't want to invest time and effort in maintaining relationships with companies They feel that companies are not "pulling their weight" in these arrangements How to avoid/correct this problem? See through consumers' eyes. Companies must understand consumer perception on one-to-one marketing, see the examples in the next slide Regain customers' trust. To rebuild consumers' trust in marketers, companies can prove—through their actions—that a one-to-one relationship can be valuable and stress-free for customers. To do this, firms can rethink these aspects of marketing: Product design, Consumer control, Handling of personal information Build honest relationships: The parties know one another—their motives, quirks, communication styles, etc Each partner is willing and able to do what may be necessary to sustain the relationship
  • PR Public relations encompasses a variety of marketing tactics that strengthen your credibility, enhance your image, develop goodwill or influence public opinion. These tactics, such as speeches, special events, newsletters, annual reports and news releases, are targeted to an audience. P.R. involves communicating who you are, what you do, and how you benefit your customers and the community.
  • PR vs. Advertising The transition from an advertising oriented marketing to PR is one of the most interesting revolution in the industry, changing the core rules of traditional marketing. A new brand can not be launched using Advertising as essential tactic, because advertising has no credibility. New brands can be launch only with powerful PR campaign, because PR allows companies to tell their story indirectly, using a third party (mostly media), that is suppose to be impartial. Unlike Advertising, PR has credibility. A good marketing program always begins with a PR campaign and continues with advertising, after PR objectives are reached. Advertising should be an extension of PR, both in time and theme. Advertising, in its spectacular expansion became irritating for the consumer and soon lost its credibility, that is why many analysts say this is the Decline of Advertising Era. While PR become the best of the marketing tactics to construct a brand (launch new brands, re-launch old brands), advertising has a new role – to support and preserve the brand.
  • Once your promotional material has been delivered, then your full marketing communications plan can swing into action. Remember ’AIDA’ - use your material to: get your customers’ Attention, keep them Interested, generate a Desire, encourage them to take Action.
  • Selecting the Right Marketing Communication Mix Gauge consumer readiness—and adapt your communications tools accordingly. Depending on how ready consumers are to respond to your marketing communications, select the right communication tools for each readiness stage. Tie your choice of communications tools to your product's life-cycle stage. Advertising and publicity, for example, will get you the biggest payoff in the introduction stage of a product. Tie your choice of tools to your company rank in the market. Market leaders derive more benefit from advertising than they do from sales promotion. Conversely, smaller competitors gain more by using sales promotion. Adapt your communications mix to the product market you're targeting. For example, personal selling can persuade retailers or dealers to buy more stock and display more product, and it boosts dealers' enthusiasm for the product and your company. Distinguish between "push" versus "pull" strategies. For example, push strategies can be effective when customers have low brand loyalty, whereas pull strategies are effective when customers have high brand loyalty.
  • To use the marketing communications tools effectively, it helps to follow some cardinal rules listed above.
  • Placement/Distribution Each salesman must decide the strategy of distribution, in order to make his product available to a specific target. The two possibilities are direct sales or through distributors. Nowadays consumers have two choices to get to the product: from stores or at home by ordering almost any type of product using: Catalogs Mail offers Home-shopping TV channels Special offers in newspapers, magazines, Radio or TV Home telemarketing Online sales, etc The number of distribution channels customer can buy the same product is increasing. You can buy a product by going to the store, by phone, e-mail, mail, etc. A company that uses only one distribution channel can miss important markets. That is why companies must choose carefully its distribution channels in order to mark its presence on the market.
  • Distribution Kash Rangan from Harvard business School has identified 8 generic channel function, listed above.
  • Example When the companies uses many distribution channel, a conflict between them is imminent. For example, a company that sells its products through dealers opens a new distribution channel – e-commerce. The dealers will the negatively affected by this action and will refuse to compete with online distribution channels.
  • CHANNEL MANAGEMENT Conflict between “partners” in a distribution system is not uncommon. Conflicts can arise from: Lack of congruence in goals , e.g. the producer’s #1 priority is to “build the consumer franchise”, while the distributor’s is to make money this quarter Lack of consensus on who is doing what, e.g. who is to perform certain functions such as after sale services; who handles small accounts, who handles national accounts, etc Channel management is more a day-to-day “work on it” task, rather than a solve-it-once situation.
  • Designing marketing strategies for services can involve different challenges because services and products have different characteristics. Services are Intangible: Customers can't see, touch, smell, or handle services before deciding whether to buy. Inseparable: Services are usually delivered and consumed simultaneously, so both the provider and the buyer influence the outcome of the service delivery. Variable: Services vary depending on who provides them and when and where they're provided; thus, controlling their quality is difficult. Transient: Services are used up upon delivery, not stored for future sale. All these characteristics can make it difficult for customers to judge the quality of a service they've purchased. So how do you design market strategies that address these unique characteristics of services? Here are some ways to focus your market strategies: Select unique processes to deliver your service. For example, offer self-service instead of table service. Train and motivate employees to service customers well. This supports the marketing-orientation philosophy that "everyone's a marketer"! Develop an attractive physical (or virtual) environment in which to deliver the service. For example, an easy-to-use and engaging Web site encourages people to learn about your company and buy your service. Differentiate the image associated with your service. For example, use a strong, suggestive image to symbolize your company’s strength and stability.
  • If traditional marketing focuses on the product, holistic marketing proposes a new vision, focusing on the customer and their satisfaction. Holistic marketing marks a step in changing the company’s whole architecture, by promoting a new concept – collaboration between consumer and the company and more, a company managed by clients! It was even invented a new word – PROSUMER – meaning that consumer not just buy product but has the opportunity to participate at its production (Dell is a famous example). The practice is common in media, many newspapers, magazines, websites, etc already publishing news written by readers.

Transcript

  • 1. Develop Marketing Strategy Chapter III
  • 2. Marketing Strategy – Two levels STRATEGIC MARKETING OPERATIONAL MARKETING
  • 3. The 4 Ps of Marketing Model
    • Product : The product aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.
    • Pricing : This refers to the process of setting a price for a product, including discounts.
    • Promotion : This includes advertising, sales promotion, PR , sales force and direct marketing , and refers to the various methods of promoting the product, brand, or company.
    • Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing.
  • 4. Develop Marketing Strategy PRODUCT…
  • 5. Product Aspects
    • The physical product
    • The brand name
    • The company reputation
    • Pre-sale education provided by salespeople
    • Post sale technical support
    • Financing plans
    • Reputation of outlet where purchased, etc
  • 6. Differentiating, positioning, and branding Differentiating Positioning MARKETING Branding The act of distinguishing your company's offering from competitors' offerings in ways that are meaningful to consumers Determining and communicating the central benefit of the product in the minds of target buyers. A product brand is a name, term, sign, symbol, or design—or any combination of these—that identifies the offering and differentiates it from those of competitors.
  • 7. Differentiation Product’s physical distinctions Product’s service distinctions
    • Form
    • Features
    • Performance quality
    • Conformance quality
    • Durability
    • Reliability
    • Reparability
    • Style
    • Design
    • Ordering ease
    • Delivery
    • Installation
    • Customer training
    • Customer consulting
    • Maintenance and repair
  • 8. Branding
    • Implies a strong brand image
    Attributes Benefits Values Culture Personality User
  • 9. Rules for Brand Names and Messages
    • You must “reserve” a particular word in the mind of potential consumer.
    • Two distinct companies can’t “reserve” the same word in the mind of potential consumer
    • If you admit a defect , the potential consumer will assign you a quality
    • Each attribute has an opposite that can be very effective
  • 10. Product Lifecycle Product Introduction Product Growth Product Maturity Product Decline Low sales, high cost per customer, no profits, few competitors Create product awareness and trial
    • Offer a basic product
    • Use heavy promotions to entice trial
    Marketing Objectives Market Strategies Rising sales and profits, more and more competitors Maximize market share
    • Offer product extensions Reduce promotions due to heavy demand
    Peaking sales and profits, stable or declining number of competitors Maximize profit while defending market share Reduce expenditure and "milk" the brand Declining sales, profits, and number of competitors
    • Phase out weak products
    • Cut price; reduce promotion
    • Diversify brands
    • Intensify promotion to encourage switching to new brands
  • 11. Why Develop New Products and Services?
    • Consumers like to have new choices
    • New products to satisfy consumer new desires and to build sales
    • Consumers attitudes toward existing products can change rapidly
    • Products have a natural life cycle and eventually become outdated
    • Your competitors are also looking for ways to offer bigger and better deals to customers
  • 12. Develop New Products and Services Start generating new product ideas Test Your Ideas Test-marketing the new product
  • 13. Generating New Products Ideas
    • Sources of BEST new products Ideas:
      • Customers
      • Competitors
      • Company's employees
      • Industry consultants and publications
      • Market-research firms
  • 14. Testing Your Ideas
    • Determine whether the ideas are compatible with your company's overall strategies and resources
    • For the products compatible with company’s strategy and resources, present the concept to target consumers
      • In focus groups
      • Through a mail-in questionnaire
    • Get customers’ reactions and ideas
  • 15. Test-Marketing New Product
    • Develop samples of the actual product
    • Test consumer goods and business goods separately
    • If the test-marketing results are positive start to produce and distribute it
  • 16. Test-Marketing Consumer Goods Sales wave Let some consumers try the product at no cost. Then re-offer the product, or a competitor's product, at slightly reduced prices. See how many customers choose your product again, and gauge their satisfaction with it. Simulated test marketing Ask a number of qualified buyers to answer questions about their product preferences. Then invite them to look at a series of commercials or print ads that include one for your new product. Finally, give them some money and set them loose in a store. See how many of them buy your product. Controlled test marketing Place your product in a number of stores and geographic locations that you're interested in testing. Test different shelf positions, displays, and pricing. Measure sales through electronic inventory control systems. Test-market This is test-marketing on a grand scale. Select a few representative cities, get your sales force to give the product thorough exposure in those cities, and unleash a full advertising and promotion campaign. See how well the product sells.
  • 17. Test-Marketing Business Goods Alpha testing Build a few units of the new product. Ask your most important and friendliest customers to try the product for free and comment on its functionality, features, and problems. Beta testing Similar to alpha testing, but it is done in the product-development process—when the product is close to be finalized. Trade show exhibits Observe how much interest participants show in the product, how they react to various features, and how many express clear intention of buying the product
  • 18. Develop Marketing Strategy PRICE…
  • 19. Product Price
    • The price is the amount a customer pays for a product
    • It depends on:
      • Market share
      • Competition
      • Product identity
      • Customer's perceived value of the product
  • 20. Product Price Product Price Positioning Promotion REVENUES COSTS
  • 21. Pricing Variables
    • Prices list
    • Discounts
    • Bundling
    • Payment terms and financing options
  • 22. Pricing
    • …“ Customers are more receptive to value, not to price. When they buy judging by price, they do it because they do not see significant differences between high price products with and low price products.”
    • Philip Kotler
  • 23. Price Customization
    • Developing a product line
      • Example: full color magazine and black and white cheaper version of the same magazine
    • Controlling the availability of lower prices
      • E.g. by making them available only in certain locations
    • Varying prices based on observable buyer characteristics
      • Example: lower prices for old, loyal clients
    • Varying prices based on observable characteristics of he transaction
      • E.g. quantity discounts could be offered if the situation were that big-volume buyers valued the product less than small-volume buyers
  • 24. What to do when Competition Stakes on Low Prices?
    • Decrease costs
    • Re-planning
    • Savings
    • Invest in new technologies (that will reduce production costs)
    • Enrich your offer (add new benefits to old products/services, launch new products/services)
    • Simply buy the competitor
  • 25. Develop Marketing Strategy PROMOTION…
  • 26. Marketing Communication Plan
    • Key Steps:
    • The marketing objectives must be clearly stated
    • The message needs to match the target markets' needs or demands
    • Implementation should be carefully planned
    • The results have to be evaluated
    Direct Marketing Public Relations Sales Promotions Direct Sales Advertising Marketing Communication Plan
  • 27. Advertising
    • Print brochures or flyers
    • Billboards
    • Point-of-purchase ads
    • Television and radio ads
    • Website banners
    Advertising forms
    • Inform (give information to the consumer)
    • Persuade (influence the consumer to buy)
    • Remind (maintain consumer awareness)
    Advertising Strengths
  • 28. Tips for Creating an Effective Print Ad
    • Clarify the purpose of the ad (format and content)
    • Get consumers' attention
    • State the product's or service's benefit for consumers
    • Give consumers a reason to act now
    • Use ad copy to your advantage
    • Use design to your advantage
    • Avoid using too many different type sizes and styles.
  • 29. Sales Promotions
    • Coupons for product savings
    • Contests
    • Free trials
    • Cash refunds
    Sales Promotions forms
    • Introduce a new product
    • Build brand loyalty
    • Gain entry into a new distribution/retail channel
    Sales Promotions Usage
  • 30. Tips for Designing a Powerful Sales Promotion
    • Use sales promotions with advertising
    • Be clear about your objectives
    • Choose the appropriate promotion tools
    • Use sales promotions in markets of high brand dissimilarity .
    • Distinguish between price promotions and added-value promotions
    • Pretest your sales promotion program
  • 31. Direct Sales
    • The salesperson's persuades the consumer to purchase the product
    Sales Promotions forms
    • Looking for new prospects
    • Communicating face-to-face
    • Selling
    • Servicing
    • Performing market research
    Salespeople’s tasks
  • 32. Tips for Evaluating Sales Representatives
    • Analyze salespeople's annual territory marketing plans
    • Review other reporting documents from sales reps
    • Compare sales reps' current performance with their past performance and company averages
    • Test sales reps' professionalism
    • Assess negotiation skills
    • Assess ability to build long-term relationships with customers
  • 33. Direct Marketing
    • Printed, mailed marketing pieces
    • Radio
    • TV
    • Telemarketing
    • Faxes E-mail
    • Web sites
    • Online services
    Direct Marketing Supports
    • Lets firms engage in relationship marketing , or one-to-one marketing
    • Companies build stronger, more profitable bonds with target customers
    Direct Marketing benefit
  • 34. Why Direct Marketing?
    • Buy mailing lists containing the names and contact information of various targets
    • Customize the messages they deliver to target customers
    • Deliver the message at the right moment
    • Achieve higher readership of printed materials
    • Test messages and media to find the most cost-effective approach
    • Conceal their offerings and strategy from competitors
    • Measure customer responses
    • Integrate direct-marketing strategies with other strategies
    • Less expensively than sales force
    • Build stronger bonds with target customers.
    • Shop more easily and quickly from home or the office
    • Choose from a larger selection of products
    • Compare products, services, and prices easily
    • Order goods 24 hours a day
    • Learn about available products or services without tying up time meeting with salespeople
    • Receive their purchases quickly through next-day delivery services
    Benefits for companies Benefits for customers
  • 35. Direct Marketing and new Technologies
    • New technologies facilitate the compilation of customer databases , allowing:
    • Identify prospects
    • Decide which customers should
    • receive a particular offer
    • Deepen customer loyalty
    • "Reactivate" customer purchases
  • 36. Direct Marketing Channels
    • Face-to-face selling
    • Direct mail
    • Catalogs
    • Telemarketing
    • Direct-response TV
    • Kiosks
  • 37. The dark side of Direct Marketing
    • Customer irritation
    • Unfairness
    • Outright deception and fraud
    • Invasion of privacy
    • Chaos and clutter
  • 38. Online Marketing
    • Internet
    • Electronic Markets
    • Electronic commerce
    • Commercial online services
    Online Marketing technologies
    • New opportunities
    • New challenges
    • New customer categories (especially young)
    Online Marketing benefits
  • 39. Online Marketing Advantages Advertising Limited amount of information; uses traditional channels: TV, radio, press Marketing activities Traditional Marketing Cyber-Marketing High amount of information available on company’s websites and also on other websites Client service Available 8 hours a day, 5 days a week, as an answer to clients requests; maintenance and training face to face only Available 24 hour a day, 7 dais a week; offers solutions by phone, fax or e-mail; fixes problems from distance, through automatic diagnose Sales Direct contact (visit) or by phone with potential clients Video-conferences with potential clients; on-line demonstrations/ presentations of the products Market Research Individual interviews, focus groups; telephone and mail surveys Online newsgroups for interviews and discussions; online / by e-mail questionnaires
  • 40. Conduct Online Marketing
    • Establish an electronic presence
    • Advertise online
    • Participate in or sponsor Internet interest groups
      • Forums
      • Newsgroups
      • Bulletin boards
    • Web communities
    • Send e-mails (electronic newsletters, special product offers, reminders of upcoming promotions, and announcements for special events)
      • Consider asking for customers' permission before sending e-mail offers
  • 41. Other Tips for Online Marketing
    • Follow standards for online ads
    • Use the Web as a direct-response tool
    • Look for ad-space bargains
    • Try to make a sale through a Web ad
    • Make your own Web site attractive and easy to use
  • 42. Example – Google AdWords Advertising Platform
    • How it works?
    • Create your ads and choose keywords (words or phrases related to your business)
    • When people search on Google using one of your keywords, your ad will appear next to the search results
    • Now you're advertising to an audience that's already interested in you
  • 43. Example – Google AdWords Advertising Platform
    • Costs and Payment
    • There's no minimum spending requirement . You can, for instance, set a daily budget of five dollars and a maximum cost of ten cents for each click on your ad
    • Google provides keyword traffic and cost estimates so you can make informed decisions about choosing keywords and maximizing your budget
    • You're charged only if someone clicks your ad , not when your ad is displayed
  • 44. Relationship Marketing
    • Combination of traditional direct-marketing media (mailings, radio spots, kiosks), new media (Internet and e-mail) and recent database technologies
    Relationship Marketing
    • Firms learn more and more about their target customers
    • Build strong, profitable bonds with their target customers
    Relationship Marketing benefits
  • 45. Why Relationship Marketing?
    • Build strong, profitable bonds with their target customers
    • Customers buy more and more often from the company, increasing firm’s profit
    • The costs associated with serving such loyal customers decreases with every purchase
    • Build bonds and accumulate a purchasing history with trusted companies
    • Avoid the time-consuming - and often stressful - process of shopping around for the best deal
    • May hear about attractive products, services, or special offers
    Benefits for companies Benefits for customers
  • 46. Relationship Marketing – A Problem
    • Relationship Marketing may imply a serious risk – consumer irritation
    • How to avoid/correct this problem?
      • See through consumers' eyes
      • Regain customers' trust
      • Build honest relationships
  • 47. Customer Perception - Examples "Too many companies want personal relationships with me!" Marketing advances seem trivial, useless, or annoying. Consumers' interest in relationship building evaporates. Customer Perception Result "Companies want my friendship, loyalty, and respect—but they're not giving me those same things in return!" Consumers see marketing as a "one-way street" that benefits companies only "Companies treat their best customers like kings and queens—and ignore the rest of their customers!" Loyal customers feel devalued. Customers feel overwhelmed and paralyzed. "Companies offer too many options—I can't keep them straight in my mind!"
  • 48. Public Relations (PR)
    • Publicity and Media Relations
    • Speeches
    • Events
    • Newsletters
    • Brochures
    • Websites
    • Annual reports
    • Letters
    • Sponsorships
    • Charitable contributions
    • Fact sheets
    • News Alerts, etc
    Public Relations tactics
    • Strengthen your credibility
    • Enhance your image
    • Influence public opinion
    Relationship Marketing benefits
  • 49. PR vs. Advertising Advertising became irritating and has no credibility; the more companies try to sell, the more customers reject the message PR is credible; customers accept the message as helping and impartial Advertising is spatial (involves many channels and resources); but after the campaign is over, the return is tot as attractive as expected PR is a linear (step by step) and long term process, which consolidates the brand value and the customer loyalty. Advertising is addressing to everybody PR is addressing to somebody in particular Advertising is oriented to itself PR is oriented to others
  • 50. PR vs. Advertising Advertising is costly PR does not involve high costs Advertising encourages existing product lines extension PR encourages new brands Advertising does not need to be creative; it has to work with ideas already present in consumer’s mind (due to PR) PR is creative Advertising is visual PR is verbal Advertising is funny PR is serious Advertising dies PR lives
  • 51. AIDA of the Communication Plan
    • Get your customers’ A ttention
    • Keep them I nterested
    • Generate a D esire
    • Encourage them to take A ction
  • 52. Tips for Selecting the Right Marketing Communications Mix
    • Gauge consumer readiness—and adapt your communications tools accordingly
    • Tie your choice of communications tools to your product's life-cycle stage
    • Tie your choice of tools to your company rank in the market
    • Adapt your communications mix to the product market you're targeting
    • Distinguish between "push" versus "pull" strategies
  • 53. What You Need to Remember
    • Tailor your promotional message to meet the needs of each different segment of your audience
    • If your budget is limited, use different ways to make the most of what you have to spend on marketing communication (e.g. consider a two-color brochure rather than a full color one)
    • Use World Wide Web as a tool for communicating with your customers
    • Be prepared to invest time and resources in your ’website maintenance’ to make the most of your investment
  • 54. Form for Drafting Communication Plan (1)
  • 55. Form for Drafting Communication Plan (2)
  • 56. Form for Drafting Communication Plan (3)
  • 57. Develop Marketing Strategy Placement (Distribution)…
  • 58. Placement/Distribution
    • Distribution refers to how the product gets to the customer
    • Includes all aspects of distribution:
      • The channel by which a product gets “in touch” with customer and the firm “goes on market”
      • Which geographic region or industry
      • To which segment (young adults, families, business people), etc
  • 59. Distribution Channels Functions
    • Product information
    • Product customization
    • Product Quality Assurance
    • Lot size (e.g. the ability to buy small quantities)
    • Product assortment (breadth, length and width of product lines)
    • Availability
    • Aster-sale service
    • Logistics
  • 60. A Paradox
    • To many distribution channels might be difficult to control.
    • More, a conflict between channels is imminent.
    • A high number of distribution channels ensures coverage of all targeted markets
  • 61. Channel Management
    • Pay extra attention to proper design of contracts and other explicit understandings that can generate conflicts
    • Good communication
      • Almost always will me necessary to resolve issues since contracts cannot typically anticipate all the situation that may arise
  • 62. How to operate direct sales without loosing distributors channel?
    • Operate direct sales to important (high value) clients, and leave the smaller customers to distributors
    • Develop new products that can be sold directly to customers, and that differ from the ones distributors sell
    • Give up distributors and operate direct sales only
  • 63. Designing marketing strategies for services
    • Select unique processes to deliver your service
    • Train and motivate employees to service customers well
    • Develop an attractive physical (or virtual) environment in which to deliver the service
    • Differentiate the image associated with your service
  • 64. Holistic Vision of Marketing
    • Holistic marketing focuses on consumer and implies 4 major processes:
      • Better understanding consumers needs, behavior and life style
      • Structuring all the departments in the “client oriented” spirit
      • Evaluating the impact of company’s actions on all people involved financially: clients, employees, distributors, suppliers, not just shareholders
      • Having a broader vision on the industry , its players and evolution
  • 65. Signals that Your Marketing Strategy is not Working
    • The sales are constant or dropping and the company needs a strategy to increase the volume of sales
    • The sales have ups and downs and need to be brought to a relative constant trajectory
    • The sales are acceptable but the profit margin is too low
    • Profits from different products, consumer segments or distribution channels are too low