MARKETING MANAGEMENT Lecture Notes for Business Introduction By Fahmy Radhi

Marketing Concepts Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of idea, goods, and service to create exchanges that satisfy individual and organizational objective Marketing Mix is the combination of products, price, promotion, and distribution, used to satisfy the needs of the target market

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of idea, goods, and service to create exchanges that satisfy individual and organizational objective

Marketing Mix is the combination of products, price, promotion, and distribution, used to satisfy the needs of the target market

Product Variety Quality Design Features Brand Name Packaging Services Price List price Discounts Allowances Credit Terms Promotion Advertising Personal Selling Sales Promotion Public Relations Place Channels Coverage Assortments Locations Inventory Transportation Logistics Target Costumers Intended Positioning Marketing Mix

Marketing Activities Product: Develop new products Modify existing products Test-market products Select brand name Package product Pricing: Establish price objectives Conduct cost analysis Analyze competitor’s price Set actual prices

Product:

Develop new products

Modify existing products

Test-market products

Select brand name

Package product

Pricing:

Establish price objectives

Conduct cost analysis

Analyze competitor’s price

Set actual prices

Marketing Activities Promotion: Determine types of promotion Design the advertising massage Selecting advertising media Schedule the advertisements Distribution: Select wholesalers and retailers Establish procedures for handling and moving products Find the best locations for plants, warehouses and retail outlets

Promotion:

Determine types of promotion

Design the advertising massage

Selecting advertising media

Schedule the advertisements

Distribution:

Select wholesalers and retailers

Establish procedures for handling and moving products

Find the best locations for plants, warehouses and retail outlets

Market Market is people with the authority, financial ability, and willingness to purchase a product Types of Market: Consumer market - for personal use Industrial market - to use in the production or resell

Market is people with the authority, financial ability, and willingness to purchase a product

Types of Market:

Consumer market - for personal use

Industrial market - to use in the production or resell

Target Marketing Target market - a group of people that has similar wants and needs which a firm directs its marketing activities Undifferentiated approach – one marketing mix for a product to the total market Market Segmentation approach – the division of the total market into segment with marketing mix directed to different segment

Target market - a group of people that has similar wants and needs which a firm directs its marketing activities

Undifferentiated approach – one marketing mix for a product to the total market

Market Segmentation approach – the division of the total market into segment with marketing mix directed to different segment

Market Segmentation Market segment – division of heterogonous market into homogonous market based on different characteristics Segmentation Based: Geographic bases - city, region Demographic bases - sex, race, marital Psychographics - a person’s attitude, lifestyle Product-related - brand loyalty

Market segment – division of heterogonous market into homogonous market based on different characteristics

Segmentation Based:

Geographic bases - city, region

Demographic bases - sex, race, marital

Psychographics - a person’s attitude, lifestyle

Product-related - brand loyalty

PRODUCT Product - a good, service or idea, including all attributes provided in an exchange between buyer and seller Product Classification : Consumer goods – products purchased by consumers for personal use Industrial goods – product purchased by companies to produce other products

Product - a good, service or idea, including all attributes provided in an exchange between buyer and seller

Product Classification :

Consumer goods – products purchased by consumers for personal use

Industrial goods – product purchased by companies to produce other products

Classifying Goods Consumer Goods : Convenience good – inexpensive and regularly consumed Shopping goods – moderately expensive and infrequently Specialty goods – expensive and rarely Industrial goods : Raw material Components parts Equipment and installations Services

Consumer Goods :

Convenience good – inexpensive and regularly consumed

Shopping goods – moderately expensive and infrequently

Specialty goods – expensive and rarely

Industrial goods :

Raw material

Components parts

Equipment and installations

Services

Product Line and Product Mix Product Line - a group of related products that are considered a unit because of marketing, technical or use similarity Product Mix - the total group of product offer sale, or all of the firm’s product lines Product Differentiation – creation of product or product image that differs from existing product to attract consumers

Product Line - a group of related products that are considered a unit because of marketing, technical or use similarity

Product Mix - the total group of product offer sale, or all of the firm’s product lines

Product Differentiation – creation of product or product image that differs from existing product to attract consumers

Product Attributes Brand - a name, sign, symbol, design, or combination a company’s product to distinguish it product from others Packaging - the development of a container and graphic design for a product Labeling - the display of important information on a product package

Brand - a name, sign, symbol, design, or combination a company’s product to distinguish it product from others

Packaging - the development of a container and graphic design for a product

Labeling - the display of important information on a product package

PRICING Price - the value that buyer exchange for a product in the marketing transaction Pricing Objective : Market share Profit Return on Investment Status Quo

Price - the value that buyer exchange for a product in the marketing transaction

Pricing Objective :

Market share

Profit

Return on Investment

Status Quo

Pricing Decision and Methods Factors in Pricing Decisions: Price and non-price competition Supply and demand Consumer perception of price Pricing Methods: Cost-Oriented Pricing - Mark-up Pricing Demand-Oriented Pricing - Break event point Competition Oriented Pricing

Factors in Pricing Decisions:

Price and non-price competition

Supply and demand

Consumer perception of price

Pricing Methods:

Cost-Oriented Pricing - Mark-up Pricing

Demand-Oriented Pricing - Break event point

Competition Oriented Pricing

Pricing Strategies Pioneer pricing – leadership pricing in the market Price skimming – setting an initial high price to cover new product cost and generate a profit Penetration pricing – setting an initial low price to establish a new product in the market Psychological Pricing – setting an initial high price to respond irrationally consumers Price Discounting – Price reduction offered as an incentive to purchase

Pioneer pricing – leadership pricing in the market

Price skimming – setting an initial high price to cover new product cost and generate a profit

Penetration pricing – setting an initial low price to establish a new product in the market

Psychological Pricing – setting an initial high price to respond irrationally consumers

Price Discounting – Price reduction offered as an incentive to purchase

PROMOTION Promotion - t he communication of favorable, persuasive information about a firm or product in order to influential buyers Promotional Objectives: Informing Increasing sales Stabilizing sales Positioning the product Building a public image

Promotion - t he communication of favorable, persuasive information about a firm or product in order to influential buyers

Promotional Objectives:

Informing

Increasing sales

Stabilizing sales

Positioning the product

Building a public image

The Promotion Mix Promotion Mix - the combination of advertising, personal selling, sales promotion, publicity used to promote a specific product

Promotion Mix - the combination of advertising, personal selling, sales promotion, publicity used to promote a specific product

Advertising Non-personal communication to a target audience through a mass medium, such as TV, Radio, newspapers, or magazines, and outdoor display Types of Advertising: Primary-Demand Advertising: for all products Selective Brand Advertising: for specific products Institutional Advertising: create public image

Non-personal communication to a target audience through a mass medium, such as TV, Radio, newspapers, or magazines, and outdoor display

Types of Advertising:

Primary-Demand Advertising: for all products

Selective Brand Advertising: for specific products

Institutional Advertising: create public image

Advertising Promotion Advertising Media – variety of communication devices for carrying massage to potential customers Direct Mail – delivery massage directly to customer places Internet Advertising – put the massage into website or mailed directly to customer email

Advertising Media – variety of communication devices for carrying massage to potential customers

Direct Mail – delivery massage directly to customer places

Internet Advertising – put the massage into website or mailed directly to customer email

Personal Selling Person-to-person communication with one or more prospective customers in order to make sale Telemarketing – using telephone to perform the personal selling process Types of Salespeople: Order Getter Order taker Support salespeople

Person-to-person communication with one or more prospective customers in order to make sale

Telemarketing – using telephone to perform the personal selling process

Types of Salespeople:

Order Getter

Order taker

Support salespeople

Sales Promotion An activity that offers customers or marketing intermediaries direct incentives for purchasing a product Type of Sales Promotion: Coupon: reduces the price of a product by stated amount at the time of purchase Rebate: an extra discount Free Sample Contest: consumer compete for prizes Trade show

An activity that offers customers or marketing intermediaries direct incentives for purchasing a product

Type of Sales Promotion:

Coupon: reduces the price of a product by stated amount at the time of purchase

Rebate: an extra discount

Free Sample

Contest: consumer compete for prizes

Trade show

Publicity and Public Relation Publicity - a non-personal form of communication transmitted in news story form and not paid for directly sponsor Public Relations - a set of communication activities designed to create and maintain a favorable public image for firm

Publicity - a non-personal form of communication transmitted in news story form and not paid for directly sponsor

Public Relations - a set of communication activities designed to create and maintain a favorable public image for firm

Major Public Relation Tools Special Events Written Materials Public Service Activities Speeches News Audiovisual Materials Corporate Identity Materials Web Site

Promotional Strategy: Push Strategy : promotion of a product to wholesaler or retailers in the marketing channel, who in turn promote the product to consumers Pull Strategy: promotion of a product direct to consumers to stimulate strong consumer demands

Push Strategy : promotion of a product to wholesaler or retailers in the marketing channel, who in turn promote the product to consumers

Pull Strategy: promotion of a product direct to consumers to stimulate strong consumer demands

DISTRIBUTION Channel of Distribution - a group of interrelated organization that directs the flow of products from producers to ultimate consumers Marketing Intermediary - a n individual or organization in marketing channel that provides a link among producers, other channel members, and final consumer

Channel of Distribution - a group of interrelated organization that directs the flow of products from producers to ultimate consumers

Marketing Intermediary - a n individual or organization in marketing channel that provides a link among producers, other channel members, and final consumer

Type of Marketing Channels: Consumer Products: Producer-consumer: plant and flower, services Producer-retailer-consumer: automobile, furniture Producer-wholesaler-retailer-consumer: e.g. convenience goods Producer-Agent/broker-wholesaler-retailer-consumer: e.g. consumer products

Consumer Products:

Producer-consumer: plant and flower, services

Producer-retailer-consumer: automobile, furniture

Producer-wholesaler-retailer-consumer: e.g. convenience goods

Producer-Agent/broker-wholesaler-retailer-consumer: e.g. consumer products

Type of Marketing Channels Industrial Products: producer-industrial user: heavy equipment and machinery producer-wholesaler-industrial user: tools and automotive parts

Industrial Products:

producer-industrial user: heavy equipment and machinery

producer-wholesaler-industrial user: tools and automotive parts

Distribution Overages Intensity Distribution - m arket coverage in which all available outlets are used for distributing a product Selective Distribution - Market coverage in which only some of the available outlets are used for distributing a product Exclusive Distribution - Market coverage in which one outlet is used in specific geographic area for distributing a product

Intensity Distribution - m arket coverage in which all available outlets are used for distributing a product

Selective Distribution - Market coverage in which only some of the available outlets are used for distributing a product

Exclusive Distribution - Market coverage in which one outlet is used in specific geographic area for distributing a product

Wholesaling The marketing activities of intermediates who sell to retailer, industrial users, and other wholesalers. Types of Wholesalers: Merchant Wholesaler: takes ownership of goods and the risks associated with ownership Sales Branch: a manufacture-owned wholesaler that take title to products, risks, and provides service Agent: a wholesaler hired by a buyer or seller on a permanent basis and paid commissions Broker: a wholesaler who bring together buyers and seller on temporary basis

The marketing activities of intermediates who sell to retailer, industrial users, and other wholesalers.

Types of Wholesalers:

Merchant Wholesaler: takes ownership of goods and the risks associated with ownership

Sales Branch: a manufacture-owned wholesaler that take title to products, risks, and provides service

Agent: a wholesaler hired by a buyer or seller on a permanent basis and paid commissions

Broker: a wholesaler who bring together buyers and seller on temporary basis

Retailing The marketing activities involved in selling products to final consumers for personal or household use Department Store: a large retailer organized into separate departments and offering a full line of services and wide product mix Supermarket: a large self-service retailer that stock a wide variety of groceries and a limited assortment of nonfood products

The marketing activities involved in selling products to final consumers for personal or household use

Department Store: a large retailer organized into separate departments and offering a full line of services and wide product mix

Supermarket: a large self-service retailer that stock a wide variety of groceries and a limited assortment of nonfood products

Retailing Catalog Showroom: a form of warehouse show-room where customers select products from catalogs sent to customers’ homes or available in the store Direct Marketing: non-store retailing that uses non-personal media to introduce products to consumers who then purchase the product by mail, telephone, computer, or TV

Catalog Showroom: a form of warehouse show-room where customers select products from catalogs sent to customers’ homes or available in the store

Direct Marketing: non-store retailing that uses non-personal media to introduce products to consumers who then purchase the product by mail, telephone, computer, or TV

Physical Distribution Those activities that involve the movement of products through marketing channels from manufacturer to customer, including: Transportation: shipping goods to customers by rail, air, truck, water, and pipeline Warehousing : the receiving, storing, and shipping activities involved in the physical distribution of goods Order Processing: the receipt and preparation of an order for shipment Material Handling: the physical handling of products during transportation and warehousing

Those activities that involve the movement of products through marketing channels from manufacturer to customer, including:

Transportation: shipping goods to customers by rail, air, truck, water, and pipeline

Warehousing : the receiving, storing, and shipping activities involved in the physical distribution of goods

Order Processing: the receipt and preparation of an order for shipment

Material Handling: the physical handling of products during transportation and warehousing

Basic Channels of Distribution Manufacturers/products Agents/brokers Wholesalers/distributors Retailers Retailers Consumers and organizational end users

Typical Distribution of Drugs Manufacturers Marketing Agents Retailers/Wholesalers/Distributors Patient Public Hospitals / Institutions Private GPs/specialists Group Procurement Office Retail Pharmacy