marketing mix of global business


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Marketing mix

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marketing mix of global business

  1. 1. Chapter TwoMarketing Mix 1
  2. 2. Marketing Mix:• Marketing ‘tactics’ or tools or 4Ps• Other Ps – People, Policy, Process, Packaging, Pace• Mix elements vary leading to different strategies, perceptions & value propositions.• Car – Mix of Engine, Mileage, Looks, Price, Features, Quality, EMI options. Marketing Mix 2
  3. 3. Marketing Mix Marketing Mix 3
  4. 4. Product PriceBrand, features, design, quality, range, Strategies, credit, costswarranty, AMC, service, size, packing,performancePromotion PlaceSales promotion, Personal selling, Channels, location, coverage,Advertising, Sponsorship, Multi-level transportation, inventory, spread, reach,Marketing, Direct Marketing, Trade fair & shippersExpositions Marketing Mix 4
  5. 5. Promotion• Marketing Communication• Objectives – Sales, attract/retain/convert. Trial, awareness, remind, reassure.• Retention Levels - Reading – 10%, Listening – 20%, Audio- visual – 70%. Sight, Sound, Motion effective.• Integrate individual promotion components for effective communication. Marketing Mix 5
  6. 6. Promotion Tools/ MixPromotion Tool ExamplesSales Promotion Contests Coupons FinancePersonal Selling Presentations Samples DemoPR Inserts Press Kit SeminarsAdvertising Advertisements Hoardings BannersSponsorship Events ThemeMLM Network CommissionDirect Database Mailers CRMTrade Fair/ Expo Demos Brochures Techno Info 6 Marketing Mix
  7. 7. Place (Distribution/Channel/Intermediary)• Set of institutions performing activities to move product from production to consumption.• Functions: Order processing, warehousing, inventory, transportation, collections.• Ensures: Availability, visibility, movement, CRM, Feedback• Width: Trade coverage. Reach: Customer Coverage. Depth: Brand coverage.• Growing impact of convergence – internet, mobile, retial. Marketing Mix 7
  8. 8. How Channel Members Add Value• From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers• Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them Marketing Mix 8
  9. 9. How Channel Members Add Value Marketing Mix 9
  10. 10. How Channel Members Add Value Marketing Mix 10
  11. 11. Number of Channel Levels Marketing Mix 11
  12. 12. Channel Intermediaries• Distributors – Bulk to smaller packs, handle major area, supply to stockists.• Wholesalers (stockists) – Resell to retailers. Storage, coverage essential.• Retailers – Strong customer influence, consumption/purchase pattern insights, service.• Retailer types: Specialty stores – Sports. Supermarkets – Big Bazaar. Convenience stores – Kirana. Factory Outlets – Levis. Direct Sellers. Vending Machines – Tea. Co-operatives – Apna Bazaar. Chain Stores – Dominos. Place Marketing Mix 12
  13. 13. Channel Intermediaries• Internet – Channel margins & inventory costs major savings – passed on, hence economical, death of distance, geographically disperse market, niche products reach wider audience, low entry barriers, display variety & functionality, interactive, delivery costly. Popular categories – Travel & tourism, Electronics, Books, Medicines.• 3rd party logistics (3PLs) – FedEx, UPS. Place Marketing Mix 13
  14. 14. Multichannel Distribution Systems Hybrid Marketing Channels• Multichannel Distribution systems (Hybrid marketing channels) are when a single firm sets up two or more marketing channels to reach one or more customer segments Marketing Mix 14
  15. 15. Multichannel Distribution System Marketing Mix 15
  16. 16. Channel Decisions Marketing Mix 16
  17. 17. Channel DecisionsIdentifying Major Alternatives Marketing Mix 17
  18. 18. Marketing Logistics and Supply Chain Management• Marketing logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit• Supply chain management is the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers Marketing Mix 18
  19. 19. Price• Price is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service.• Center stage in marketing wars. Inter-firm rivalry.• Product differentiation blunted.• Objectives – Profits/ROI, competitive position, demand, cost, survival, product portfolio, Entry.• Economic value proposition – Titan – High priced brand inspite of local & Grey market competition. Marketing Mix 19
  20. 20. Pricing Methods• By Cost – Cost plus and Break Even• By Competition – Going Rate, competitive pricing, cartelling, sealed bids• Customer Oriented – Perceived Value (Lifestyles), Auctions (Amazon), Value – McDonalds Happy Meals. Marketing Mix 20
  21. 21. Pricing Methods – By Cost• Cost-based pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk.• Cost-based pricing adds a standard markup to the cost of the product• Total Cost = Fixed Cost + Variable Cost Fixed Cost = Rent, Interest, Salaries Variable cost = Raw Material, Packaging Marketing Mix 21
  22. 22. Pricing Method – By Cost• Cost-plus pricing adds a standard markup to the cost of the product• Benefits: Consumers feel it is fair, Prices are similar in industry and price competition is minimized• Disadvantages: Ignores demand and competitor prices Marketing Mix 22
  23. 23. Break Even Analysis & Target Profit Pricing• Break-even pricing is the price at which total costs are equal to total revenue and there is no profit• Target profit pricing is the price at which the firm will break even or make the profit it’s seeking Marketing Mix 23
  24. 24. Break Even Analysis & Target Profit Pricing Marketing Mix 24
  25. 25. Pricing Method – By Competition Marketing Mix 25
  26. 26. Economic Models of Market structure Marketing Mix 26
  27. 27. Pricing Method – Customer Oriented• Customer Perceptions of Value: Understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value Marketing Mix 27
  28. 28. Pricing Method – Customer OrientedValue-based pricing uses the buyers’ perceptions of value, notthe sellers’ cost, as the key to pricing. Price is considered beforethe marketing program is set.• Value-based pricing is customer driven• Cost-based pricing is product driven Marketing Mix 28
  29. 29. Pricing Method – Customer OrientedCustomer Perceptions of Value Marketing Mix 29
  30. 30. Pricing Strategies Price High Medium Low High 1 - Premium 2 – High Value 3 - PenetrationQuality Medium 4 – Over Charging 5 – Medium Value 6 – Good Value Low 7 – Skimming / 8 – False Economy 9 - Economy RipOff Marketing Mix 30
  31. 31. Pricing Strategies• Premium – Sustainable advantage – Benz.• Market Penetration - Entry, Attract, Ensure Trial.• Economy – Functionality & Value – Nirma.• Skimming – Unsustainable, Significant advantage – Reliance Mobile.• 1,5,9 – coexist in the same market till buyers insist on quality, price, value.• 2,3,6 ways to attack 1,5,9• 4,7,8 overpricing . Customers feel taken, bad oral publicity, avoid. Marketing Mix 31
  32. 32. Other Pricing Strategies• Psychological: Bata• Geographical: Electronics across countries• Promotional: Extensive usage, if successful copied, if unsuccessful – financial drain• Loss leader: Factory Outlets• Special discounts/Rebates : Sales• Financing: EMIs, Low interest rates• Warranties/AMCs: Extended warranties, Free AMC• Psychological discounting: Prices slashed• Exchange Offers: New in exchange for old• Value: Superstores – Big Bazaar Marketing Mix 32
  33. 33. Product• A Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want• “Our plan is to lead the public with new products than ask them what products they want. The public does not know what is possible, but we do. So instead of doing a lot of market research, we try to create a market for a product by educating them.” – Akio Morita, Sony. Marketing Mix 33
  34. 34. Levels of Product Marketing Mix 34
  35. 35. Levels of ProductCore product: Core benefit offered.A mobile phone buyer purchases mobility, anytime access & dataand voice communication.Actual Product:As all mobiles offer core benefits, Differentiate to enticepotential customers.Communicate branding, features and benefits.Augmented Product:Additional non-tangible benefits. Extended warranties, EMI,Delivery & insurance.Convey security, payment options Mix peace of mind/ Marketing & 35
  36. 36. New-Product Development ProcessMajor Stages in New-Product Development Marketing Mix 36
  37. 37. New-Product Development Process – Marketing Strategy Development• Marketing strategy development refers to the initial marketing strategy for introducing the product to the market• Marketing strategy statement includes: – Description of the target market – Value proposition – Sales and profit goals• Marketing Mix (4Ps), STPD, Targets, Projections, Geographies. Marketing Mix 37
  38. 38. New-Product Development Process – Business Analysis• Business analysis involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives Marketing Mix 38
  39. 39. New-Product Development Process – Product DevelopmentProduct development involves the creation and testingof one or more physical versions by the R&D orengineering departments• Requires an increase in investment Marketing Mix 39
  40. 40. New-Product Development Process – Test MarketingTest marketing is the stage at which the product andmarketing program are introduced into more realisticmarketing settingsProvides the marketer with experience in testing theproduct and entire marketing program before fullintroduction Marketing Mix 40
  41. 41. Why new product development• Changing customer needs – Saffola• New segment Entry – Maruti SX4• Changing market needs – Scooters to Bikes• Own successes – Brand/Product line extensions• Competitive successes – ITC Sunfeast• New capabilities• New concepts – Tata Ace• New technology – iPod• Product lifecycle – MS Office• Portfolio/business realignment – Reliance Mobile• Environmental changes – Online music downloads. Marketing Mix 41
  42. 42. Product decisions – BrandBrand is the name, term, sign, or design—or a combination ofthese—that identifies the maker or seller of a product or serviceBrand equity is the differential effect that the brand name hason customer response to the product and its marketing Marketing Mix 42
  43. 43. Product decisions – Packaging & LabelsPackaging involves designing and producing the container orwrapper for a productLabels identify the product or brand, describe attributes, andprovide promotion Marketing Mix 43
  44. 44. Product decisions – Product support servicesProduct support services augment actual products Marketing Mix 44