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Dr. Thomas Eppel - Management 1 Chapter 13,14 : Marketing
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Dr. Thomas Eppel - Management 1 Chapter 13,14 : Marketing

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  • 1. Marketing: Introduction, Products, Pricing Chapters 13 and 14
  • 2. Overview
    • Introduction to Marketing
      • Four P’s of Marketing
      • Marketing Research
      • Market Segmentation
    • Products
      • Types of Products
      • Product Development
    • Packaging and Branding
    • Pricing
  • 3. INTRODUCTION TO MARKETING
  • 4. The Four P’s of Marketing
    • P roduct
    • P lace
    • P rice
    • P romotion
  • 5. What Is Marketing?
    • Marketing : The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large
  • 6. Four Eras of U.S. Marketing
    • Production Era
    • Selling Era
    • Marketing Concept Era
    • Customer Relationship Era
  • 7. The Production and Selling Eras
    • The general philosophy was “Produce what you can because the market is limitless”
    • After mass production, the focus turned from production to persuasion
  • 8. The Marketing Concept Era
    • After WWII, a consumer spending boom developed
    • Businesses knew they needed to be responsive to consumers if they wanted their business
  • 9. Applying the Marketing Concept
    • The Marketing Concept includes three parts:
      • Customer Orientation : Finding out what customers want and then providing it
      • Service Orientation : Making sure everyone in an organization is committed to customer satisfaction
      • Profit Orientation : Focusing on the goods and services that will earn the most profit
  • 10. The Customer Relationship Era
    • Customer Relationship Management (CRM) : Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations
    • Organizations seek to enhance customer satisfaction building long-term relationships
    • Today firms like Priceline and Travelocity use CRM that allow customers to build a relationship with the suppliers
  • 11. Developing a Product
    • Product : A good, service, or idea that satisfies a consumer’s want or need
    • Test Marketing : Testing product concepts among potential product users
    • Brand Name : A word, letter, or a group of words or letters that differentiates one seller’s goods from a competitor’s
  • 12. Pricing and Placing a Product
    • Pricing products depends on many factors:
      • Competitors’ prices
      • Production costs
      • Distribution
      • High or low price strategies
    • Middlemen are important in place strategies because getting a product to consumers is critical
  • 13. Promoting the Product
    • Promotion : All the techniques sellers use to inform people about their products and motivate them to purchase those products
    • Promotion includes:
      • Advertising
      • Personal selling
      • Public relations
      • Viral marketing
      • Sales promotions
  • 14. MARKETING RESEARCH
  • 15. Searching for Information
    • Marketing Research : Analyzing markets to determine challenges and opportunities, and finding the information needed to make good decisions
    • Research is used to identify products consumers have used in the past and what they want in the future
    • Research uncovers market trends and attitudes held by company insiders and stakeholders
  • 16. Collecting Secondary Research Data
    • Secondary Data : Existing data that has previously been collected by sources like the government
    • Secondary data incurs no expense and is usually easily accessible
    • Secondary data doesn’t always provide all the needed information for marketers
  • 17. Collecting Primary Research Data
    • Primary Data : In-depth information gathered by marketers from their own research
    • Telephone, online and mail surveys, personal interviews, and focus groups are ways to collect primary data
  • 18. Focus Groups
    • Focus Group : A group of people who meet under the direction of a discussion leader to communicate opinions
  • 19. Ways to Find Out What Consumers Think
    • Conduct informal consumer surveys
    • Host a customer focus group
    • Listen to competitor’s customers
    • Survey your sales force
    • Become a “phantom” customer
  • 20. Scanning the Marketing Environment
    • Environmental Scanning : The process of identifying factors that affect marketing success
    • Factors involved in the environmental scan include:
      • Global factors
      • Technological factors
      • Sociocultural factors
      • Competitive factors
      • Economic factors
  • 21. The Marketing Environment
  • 22. The Consumer and B2B Market
    • Consumer Market : All the individuals or households that want goods and services for personal use and have the resources to buy them
    • Business-to-Business (B2B) : Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others
  • 23. MARKET SEGMENTATION
  • 24. Marketing to Consumers
    • The size and diversity of the consumer market forces marketers to decide which groups they want to serve
    • Market Segmentation : Divides the total market into groups with similar characteristics
    • Target Marketing : Selecting which segments an organization can serve profitably
  • 25. Segmenting the Consumer Market
    • Geographic Segmentation : Dividing the market by cities, counties, states, or regions
    • Demographic Segmentation : Dividing the market by age, income, education, and other demographic variables
    • Psychographic Segmentation : Dividing the market by group values, interests, and opinions
  • 26. Segmenting the Consumer Market (cont.)
    • Benefit Segmentation : Dividing the market according to product benefits the customer prefers
    • Volume (Usage) Segmentation : Dividing the market by the volume of product use
  • 27. Marketing to Small Segments
    • Niche Marketing : Identifies small but profitable market segments and designs or finds products for them
    • One-to-One Marketing : Developing a unique mix of goods and services for each individual consumer
  • 28. Mass Marketing vs. Relationship Marketing
    • Mass Marketing : Developing products and promotions to please large groups of people
    • Relationship Marketing : Rejects the idea of mass production and focuses toward custom-made goods and services for customers
  • 29. The Consumer Decision Making Process and Outside Influences
  • 30. Business-to-Business Market (B2B)
    • B2B marketers include:
      • Manufacturers
      • Wholesalers and retailers
      • Hospitals, schools and charities
      • Government
    • Products are often sold and resold several times before reaching final consumers
  • 31. B2B Market Differences
    • There are relatively few customers
    • Customers tend to be large buyers
    • Markets are geographically concentrated
    • Buyers are more rational than emotional
    • Sales are direct
    • Promotions focus heavily on personal selling
  • 32. PRODUCTS
  • 33. Developing Value
    • According to the American Marketing Association , value is a foundation of marketing
    • Value : Good quality at a fair price
    • Adapting products to new markets is an ongoing challenge
    • Product development is a key activity in any modern business
  • 34. Developing a Total Product
    • Total Product Offer : Everything consumers evaluate when deciding whether to buy something
    • Products are evaluated on many different dimensions, both tangible and intangible
    • Marketers must think like and talk to consumers to find out what’s important
  • 35. Potential Components of a Total Product Offer
  • 36. Understanding Product Lines
    • Product Line : A group of products that are physically similar or intended for a similar market
    • Product lines often include competing brands like:
      • M&Ms
      • Peanut M&Ms
      • Mint M&Ms
      • Dark Chocolate M&Ms
  • 37. The Product Mix
    • Product Mix : The combination of all product lines offered by a manufacturer or service provider
    • Product mixes like Proctor & Gamble ’s can be extensive:
      • Laundry detergent
      • Cosmetics
      • Diapers
      • Potato chips
      • Bar soap
  • 38. iPod Product Line
  • 39. Apple: Product Mix
  • 40. Differentiating Products
    • Product Differentiation : The creation of real or perceived product differences
    • Marketers use a mix of pricing, advertising and packaging to create different images. Examples include:
      • Bottled water
      • Aspirin
      • Fast-food
      • Laundry detergent
      • Shampoo
  • 41. Classifying Consumer Goods and Services
    • Convenience Goods and Services : Products consumers purchase frequently with minimal effort. These include:
      • Candy and snacks
      • Gas
      • Milk and eggs
  • 42. Classifying Shopping Goods and Services
    • Shopping Goods and Services : Products consumers buy only after comparing value, quality, price, and styles. These include:
      • Clothes and shoes
      • Appliances and furniture
      • Childcare
      • Home remodeling
  • 43. Classifying Specialty Goods and Services
    • Specialty Goods and Services : Products with unique characteristics and brand identity
    • These include:
      • Tiffany jewelry
      • Rolex watches
      • Lamborghini automobiles
      • Ritz Carlton Hotels
  • 44. Classifying Unsought Goods and Services
    • Unsought Goods and Services : Products consumers aren’t aware of or haven’t thought of buying until they need them. These include:
      • Car-towing services
      • Funeral services
      • Renter’s insurance
  • 45. Classifying Industrial Goods and Services
    • Industrial Goods : Products used in the production of other products and sold in the B2B market
    • Industrial goods include:
      • Installations
      • Capital items
      • Accessory equipment
      • Supplies
      • Service
  • 46. PACKAGING AND BRANDING
  • 47. Some Key Functions of Packaging
    • To attract buyers’ attention
    • Protect the goods inside and be tamperproof
    • Describe and provide information about the product
    • Explain the product’s benefits
    • Provide warranty information and warnings
    • Give an indication of price, value, and uses
  • 48. Understanding Branding
    • Brand : Name, symbol, or design that identifies the goods or services and distinguishes them from competitors’ offerings
    • Trademark : A brand that has exclusive legal protection for both its brand name and design
  • 49. Key Brand Categories
    • Manufacturers’ Brands : Brand names of manufacturers that distribute products nationally
    • Dealer (Private-Label) Brands : Products that carry a retailer’s or distributor’s brand name instead of a manufacturer’s
  • 50. Key Brand Categories (cont.)
    • Generic Goods : Non-branded products that sell at a discount compared to manufacturers’ or dealers’ brands
    • Knockoff Brands : Illegal copies of national brands
  • 51. Establishing Brand Equity and Loyalty
    • Brand Equity : The combination of factors (awareness, loyalty, perceived quality, images, and emotions) that people associate with a brand name
    • Brand Loyalty : The degree to which consumers are satisfied and are committed to further purchases
  • 52. Building Brand Awareness
    • Brand Awareness : How quickly or easily a given brand name comes to mind when someone mentions a product category
    • Consumers reach a point of brand preference when they prefer one brand over another
    • When consumers reach brand insistence, they will not accept substitute brands
  • 53. Building Brand Associations
    • Brand Association : Linking a brand to other favorable images, like celebrities or a geographic area
    • Brand Manager : Person responsible for a particular brand and handles all the elements of the brand’s marketing mix
  • 54. NEW PRODUCT DEVELOPMENT
  • 55. The New Product Development Process
  • 56. iPod Launch
  • 57. IDEO
  • 58. Bringing New Products to the Market
    • Product Screening : Reduces the number of new products a firm is working on to focus on the most promising
    • Product Analysis : Focuses on the cost estimates and sales forecasts to get an idea of potential profitability
  • 59. Bringing New Products to the Market (cont.)
    • Concept Testing : Takes a product idea to consumers to test reactions
    • Commercialization : Promoting the product to distributors and retailers and developing the promotional campaign
  • 60. The Four Stages of a Product Life Cycle
    • Product Life Cycle : A theoretical look at what happens to sales and profits for a product over time
    • Product Life Cycle Stages:
      • Introduction
      • Growth
      • Maturity
      • Decline
  • 61. Sales and Profits During the Product Life Cycle
  • 62. PRICING
  • 63. Pricing Objectives
    • Achieving a target return on investment or profit
    • Building traffic
    • Achieving greater market share
    • Creating an image
    • Furthering social objectives both short-run and long-run
  • 64. Pricing Strategies
    • Cost-based pricing measures cost of producing a product including materials, labor, and overhead
    • Target Costing : Making the final price of a product an input in the product development process by estimating the selling price consumers will pay
    • Competition-Based Pricing : A strategy based on what the competition is charging for its products
  • 65. Using Break-Even Analysis
    • Break-Even Analysis : The process used to determine profitability at various levels of sales. The break-even point is where revenues equals cost
    • Total Fixed Costs : All costs that remain the same no matter how much is produced or sold
    • Variable Costs : Costs that change according to the level of production
  • 66. Pricing Alternatives
    • Skimming Price Strategy : Pricing new products high to recover costs and make high profits while competition is limited
    • Penetration Price Strategy : Pricing products low with the hope of attracting more buyers and discouraging other companies from competing in the market
    • Everyday Low Pricing (EDLP) : Setting prices lower than competitors with no special sales
  • 67. Pricing Strategies of Retailers
    • High-Low Pricing : Using regular prices that are higher than EDLP except during special sales when they are lower
    • Psychological Pricing : Pricing products at price points that make a product seem less expensive than it is
  • 68. SUMMARY
  • 69. Summary
    • Products
      • Value of products
      • Product mix and product line
      • Types of products
    • New Product Development
      • Product life cycle
    • Packaging and Branding
    • Pricing