Summary Overview The objective for the place, or distribution, element of the marketing mix is to get the right product, to the right consumer, in the right place, at the right time, in the right quantity, and in the right condition, hopefully all at a reasonable cost. Key Issues Channel of distribution --any series of firms or persons used to move goods from producers to final users. Channels can be: very long or very short; simple or complex. Marketers must: find the best kinds and types of channels for the product; effectively manage the channel. Discussion Question : What are some of the reasons why marketers are paying increased attention to their distribution strategies and tactics? Hint: Think about what happens when distribution does not work as it should. Other aspects of place: logistics or physical distribution; roles of middlemen, such as wholesalers and retailers. This slide relates to material on pp. 31-32.
Summary Overview Promotion involves telling the target market and others in the channel of distribution about the other elements of the marketing mix. There are four main types of promotion. Key Issues Personal selling --direct communication between sellers and potential customers. Mass selling --communicates with large numbers of customers at the same time. Advertising --any paid form of nonpersonal presentation of ideas, goods, and services by an identifying sponsor. Publicity —unpaid, nonpersonal presentation of ideas. Discussion Question : An old adage in marketing is that “Advertising is paid for, publicity is prayed for.” What is meant by this statement? What implications does the statement have for the marketing manager? Direct Marketing —communicating with carefully selected individual customers to secure an immediate response. Sales promotion --promotion activities, other than advertising, publicity, and personal selling, that stimulate interest, trial, or purchase. This slide relates to material on p. 32. Indicates place where slide “builds” to include the corresponding point.
Summary Overview Price is the revenue-generating function of the marketing mix. In setting the “ right ” price, marketing managers must consider many factors, all of which combine to make pricing a combination of science and art. Key Issues Marketers can choose from several different pricing objectives and policies. Among the policies are: price flexibility ; how price changes over the product life cycle ; various allowances, discounts, and geographic terms that affect the final price. Discussion Question : Can you think of examples of products, introduced in the last few years, whose prices changed significantly the longer they were in the market? Is the age of the product the only factor in these price changes? In addition, the marketer must be familiar with the various factors in the legal environment that affect pricing strategy. Other aspects of price include: cost structure and the demand ; price sensitivity ; competition, available substitutes ; impact of the price of one product on any other products offered by the organization. This slide relates to material on pp. 32-33. Indicates place where slide “builds” to include the corresponding point.
This slide relates to material on pp. 33-34. Indicates place where slide “builds” to include the corresponding point. Summary Overview All of the four Ps--product, place, promotion and price--have an impact on satisfying the needs of consumers in the target market. No single area is more important than the others- -they are all interconnected. Key Issues In developing a marketing strategy, the jobs of selecting a target market and developing the marketing mix are interrelated . The outcome of the strategy is evaluated against the objectives of the marketer. Discussion Question : Choose a product or service and discuss how the elements of the marketing mix interact with each other. For example, how do product decisions affect decisions about place, promotion, and price? Keeping in mind the marketing concept, the needs of the target market determine the nature of the marketing mix, so developing a thorough understanding of the target market leads to good strategies . Your text provides an example of Toddler University (Marketing Demo 2-1, pp. 33-34), a shoe company whose shoes were targeted to a specific type of parent. The company’s founder understood the target market very well, developed a marketing mix aimed at the needs of the target market, and increased sales from $100,000 to $40 million in four years!
An Overview of Marketing: Managing Profitable Customer Relationships Chapter 1
Activity or benefit offered for sale that is essentially intangible and does not result in the ownership of anything.
Products Anything that can be Offered to a Market to Satisfy a Need or Want What Will Satisfy Consumer’s Needs and Wants? Services Activities or Benefits Offered for Sale That Are Essentially Intangible and Don’t Result in the Ownership of Anything Experiences Persons Places Organizations Ideas Information
If performance is lower than expectations, satisfaction is low
If performance is higher than expectations, satisfaction is high
How Do Consumers Choose Among Products and Services? Total Quality Management Involves Improving the Quality of Products, Services, and Marketing Processes Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value
The set of actual and potential buyers of a product.
These people share a need or want that can be satisfied through exchange relationships.
Who Purchases Products and Services? Unexpected Situational Factors Attitudes of Others Ethical Potential Buyers Market – Buyers who share a particular need or want that can be satisfied through exchange or relationships. Actual Buyers People Who Exhibit Need Resources to Exchange Willingness to Exchange
The art and science of choosing target markets and building profitable relationships with them.
Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Demand Management Finding and increasing demand, also changing or reducing demand such as in Demarketing Profitable Customer Relationships Attracting new customers and retaining and building relationships with current customers Marketing Management
The Marketing Mix Product Place Promotion Price C
Strategic Decision Areas Product Place Promotion Price Objectives Physical Chars. Prod. Class Service Features Benefits Quality Accessories Installation Instructions Warranty Product Line(s) Packaging Branding NPD? &/or Elimination? PLC Implics. Objectives Channel type Market Exposure Kinds of Intermediaries Kinds and locations of Outlets How to handle transporting and storing Service levels Recruiting Intermediaries Managing Channels Channel Co-op (Not Conflict) is Goal – Who Has Power? Objectives Initial Pricing -Penentration -Skimming -Combo P Flexibility P Sensitivity P Level over PLC Geographic terms Discounts Allowances Legal Implics. Factors Infl. Basic P Det. Objectives Promotion Mix Salespeople Kind Number Selection Training Motivation Evaluation Advertising Targets Kinds of ads Media type Copy thrust Prepared by whom Sales promotion PR Publicity
Examples of Basic Channels of Distribution for Consumer Products Manufacturer or producer AOL Nissan Del Monte Procter & Gamble Retailer Consumer Wholesaler Retailer Retailer Wholesaler Wholesaler
Controllable Promo. Elements of the Marketing Mix Personal Selling Advertising Public Relations Advertising Publicity Personal Selling Promotion Sales Promotion
Price Elements of the Marketing Mix Price Flexibility Price Changes Over the Life Cycle Pricing Objectives Price Setting Price of Other Products In the Line Pricing Objectives Discounts and Allowances Geographic Pricing Terms Legal Environment Cost and Demand Competition and Substitutes Price Sensitivity Price Flexibility Price Changes Over the Life Cycle Discounts and Allowances Geog. Pricing Terms Legal Environ’t Cost and Demand Competition and Substitutes Price Sensitivity
All Four Ps Contribute to the Whole Selection of Target Market Understanding the Target Market Leads to Good Strategies! Product Place Promo-tion Price