The Four Ps of Marketing This CTR corresponds to Figure 2-6 on p. 49 and the material on pp. 47-50. The Marketing Mix Product. In the contemporary mix, product is the term for the "goods and service" offering sold by the company. As technology makes everything from stereos to computers more accessible to the average buyer, service increasingly makes the competitive difference, especially in creating brand loyalty and generating repeat customers. Place. Place refers as much to how the product arrives to the final outlet as where the customer actually buys it. Later in the course, when students distinguish between convenience, shopping, and specialty goods the logistics of getting the product to the "place" of purchase can be emphasized again. Discussion Note: You may wish to discuss the role of infrastructure on placing decisions -- highway, rail, and waterway conditions and/or airfreight costs. Price. Price too is an excellent source of discussion content. Students will undoubtedly know about list and discount prices as many will have had shopping experiences in discount malls. The manipulation of price in the channel of distribution through allowances, credit, and payment arrangements may be new to them. Promotion. Promotion covers most of what students will stereotypically identify as "real marketing." While the role of promotion is important you may remind them the dangers of too much emphasis on a single component of the mix.
Customer Markets This CTR corresponds to Figure 3-2 on p. 73 and relates to the material on p. 72. Types of Customer Markets The company is concerned with five types of customer markets, including: Consumer Markets. These consist of individuals and households that buy goods and services for personal consumption. Business Markets. These buy goods and services for further processing or for use in their production process. Reseller Markets. Resellers buy goods and services for repackaging and reselling at a profit. Discussion Note: Students may have heard that these “middlemen” raise costs to end-users. You might point out that in most cases, resellers actually lower costs by performing marketing functions less expensively than could manufacturers. Government Markets. Governments buy goods and services to produce public services or to transfer them to needy constituents. International Markets. A growing concern for almost all marketers, these consist of those various types of buyers located in other countries.
Effective Segmentation This CTR relates to the material on pp. 215. Requirements for Effective Segmentation Measurability . This refers to the degree to which the size and purchasing power of the segments can be measured. The accuracy and availability of measures of market potential are important. Accessibility. This refers to the degree to which a market segment can be reached and served. Identifying a segment is useless if the marketer has limited access to the customer. Substantiality. This refers to the degree to which the segments are large or profitable enough to service. Actionability . This is the degree to which an effective marketing program can be designed for attracting and serving segments. Company resource limitations figure prominently in actionability issues.
Market Segmentation This CTR relates to Table 7-1 on p. 203 and the material on pp. 202-209. Bases for Segmenting Consumer Markets Geographic Segmentation. Geographic segmentation divides the market into different geographic units based upon physical proximity. While location determines how geographic segmentation is done, it is also true that many consumer products have attribute differences associated with regional tastes. Demographic Segmentation. Dividing the market into groups based upon variables such as sex, age, family size, family life cycle, income, education, occupation, religious affiliation, or nationality are all demographic segmentations. Consumer needs often vary with demographic variables. Demographic information is also relatively easy to measure. Age and life-cycle stage, sex, and income are three major demographic bases for segmentation. Psychographic Segmentation. Psychographic Segmentation divides the market into groups based on social class, life style, or personality characteristics. Psychographic segmentation cuts across demographic differences. Social class preferences reflect values and preferences that remain constant even as income increases. Life style describes helps group markets around ideas such as health, youthful, or environmentally conscious. Personalities may transcend other differences in markets and may be transferred to products themselves. Behavioral Segmentation. Behavioral Segmentation divides markets into groups based on their knowledge, attitudes, uses, or responses to a product. Types of of behavioral segmentation are based upon occasions, benefits sought, user status, usage rates, loyalty, buyer readiness stage, and attitude.
Consumer Goods Consumer products are those bought by final consumers for personal consumption. Marketers typically classify these products based on how consumer go about buying them. Classifications include: Convenience Products. These products are purchased frequently with a minimum of comparison and buying effort. Convenience products may be further divided: Staples. Staples are products that consumers buy on a regular basis. Impulse Products. Impulse products are purchased “on the spur of the moment” and without much, if any, prior consideration. Emergency Products. Emergency products are purchased to fill an urgent and immediate need. These products are prompted by some unexpected external event like a flood or heavy snow fall. Shopping Products. These products are compared on such bases as suitability, quality, price, and style. Shopping products may be further distinguished homogeneous and heterogeneous shopping products. Price negotiation is more common for homogeneous shopping products. Specialty Products. These products have unique characteristics or identification with buyers and are generally specifically sought by the consumer. Unsought Products. These products may be unknown to the buyer or not normally considered for purchase. Unsought goods require special marketing effort. Consumer Product Classifications This CTR corresponds to Table 8-1 on p. 240 and relates to the material on pp. 240-241.
Channel Levels and Channel Conflict This CTR corresponds to Figure 12-2 (A) on p. 355 and relates to the material on pp. 355-356. Channel Levels Distribution channels can be described by the number of channel levels involved. A channel level is defined as each of the marketing intermediaries that perform some work in bringing the product and its ownership closer to the final buyer. Distribution channels can be categorized broadly as: Direct Marketing Channel . This is a marketing channel that has no intermediary levels. The company sells directly to final consumers. Discussion Note: The company may not be the actual producer. Land’s End only makes a small fraction of its clothes but coordinates the sale and ships from its warehouses. Dell Computer assembles its computers on site but from component parts made elsewhere. Indirect Marketing Channels . These contain one or more intermediary levels.
The Marketing Communications Mix This CTR relates to the material on pp. 422-423. Tools of The Marketing Communications Mix Advertising. Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising often utilizes mass media and may be adapted to take advantages of a given mediums strengths to convey information. Sales Promotion. Sales promotions consist of short-term incentives to encourage purchase of sales of a product or service. Limited time offers or dated coupons are common sales promotions. Public Relations. Public relations is an on-going process of building good relations with the various publics of the company. Key elements in the process are obtaining favorable publicity, building and projecting a good "corporate image," and designing an information support and response team to respond proactively to unfavorable rumors, stories, or events. Personal Selling. Personal selling describes the use of oral presentations in a conversation with one or more prospective buyers for the purposes of making a sale. Personal selling combines product information and benefits with the interpersonal dynamics of the sales person. Good interpersonal relationship skills and effective oral communication skills are needed for personal selling. Direct Marketing. Directed communications with carefully targeted individual consumers to obtain an immediate response.
The Product Life-Cycle This CTR corresponds to Figure 9-2 on p. 288 and relates to the material on pp. 287-293. Instructor’s Note: This CTR can be used to overview the life cycle concept. Strategies appropriate for each stage are discussed on the following CTRs. Product Life Cycle Stages Product Development. Development begins when the company finds and develops a new product idea. During development the product has costs but no sales. Development costs must be strategically weighed against the projected length of the product's PLC. Introduction. During the introduction of new products initial sales growth is slow as the market is just becoming aware of the product. Profits are usually nonexistent at this stage due to heavy promotional spending. Growth. This stage is characterized by rapid market acceptance of the product and increasing profits. Maturity . In maturity there is a slowdown in sales growth as the product has achieved acceptance by most potential customers. Profits may level off or decline as marketing costs increase to defend existing market share. Decline. In this period sales begin to fall off and profits decline dramatically.
Press Relations is an on-going process of establishing and maintaining good relations with the news media reporters and editors to help place newsworthy information about company products or objectives in their vehicles. Product Publicity. Product Publicity seeks news coverage of specific products usually in conjunction with other promotional efforts. Public Affairs/ Investor Relations. Public Affairs and Investor Relations involves creating and managing internal and external communications promoting understanding the of company and its objectives. Counseling of management on public issues may be included in corporate communications functions in some companies. Lobbying. Lobbying involves dealing with legislators and government administrators. Discussion Note: Lobbying has justly earned a bad reputation for the “special interest” favors awarded some companies. But it is also true that a great deal of lobbying is ethical and fair -- a point not typically found in the popular press. Also, federalism is designed precisely so that “special interests” can be taken into consideration. Not all “special interests” are bad for society as a whole. What is Public Relations? This CTR relates to the material on pp. 468-469.
Major Public Relations Tools This CTR relates to the material on pp. 469-471. Key tools of Public Relations include: News and Speeches. Finding or creating favorable news stories about the company or products. Giving talks at trade association meetings or sales meetings. Special Events. Special Events consist of public service activities sponsored and controlled by public relations in-house. Written and Audiovisual Materials. Materials include written information for reporters, and audio-visual information such as slide, sound programs, and videos on corporate identity. Corporate spokespersons also make public speeches to promote the views important to the company. Public Service Activities. Public Service Activities include contributions of time and money for community projects and programs. Discussion Note: Many companies donate land and equipment to towns and cities for parks and recreational areas as part of PR.
Functional Marketing Management
DiplomaINTRODUCTION TO MARKETING FUNCTION Facilitator: Munif Ahmad
What is Marketing?Marketing consists of management tasks anddecisions directed at successfully meetingopportunities and threats in a dynamicenvironment, by effectively developing andtransferring a need-satisfying market offeringto consumers in such a way that the objectivesof the business, the consumer and society willbe achieved.
Key Topics1. Introduction to marketing2. Marketing research3. Customer behaviour4. Market segmentation5. The marketing mix6. The marketing strategy7. Public relations
Marketing Mix- The Four P’s Product Price “Goods-and-service” Amount of money combination that a that consumers company offers a have to pay to obtain target market the product Target Customers Intended Activities that Positioning Company activities persuade target that make the customers to buy product available the product Promotion Place
Marketing ResearchWhy? Sales forecastingKnow the research process Profit forecastingMarket forecasting 1. Define the problem to be investigated 2. Formulate hypotheses 3. Investigate hypotheses 4. Compile a questionnaire 5. Test the questionnaire 6. Select sample 7. Train fieldworkers and do fieldwork 8. Analyse data 9. Interpret the results 10. Compile the report 11. Management studies report 12. Management implements findings
Consumer Buying Behavior Consumer Buying Behavior refers to the buying behavior patterns of decision making units (individuals & households) directly involved in the purchase and use of products, including the decision- making processes preceding and determining these behaviour patterns. Study consumer behavior to answer: “How do consumers respond to marketing efforts the company might use, why do they behave the way they do?”
Customer behaviourINDIVIDUAL FACTORS GROUP FACTORS Motivation Family Attitude Reference group Perception Opinion leaders Learning ability Cultural group Personality Lifestyle Awareness of need Gathering information Evaluation Purchase action Post purchase evaluation
Factors Affecting Consumer Behavior: Individual Motivation MotivationBeliefs andBeliefs and Individual Attitudes Perception Perception Attitudes Factors Personality Personality Learning Learning And And lifestyle lifestyle
Market segmentationWhat is a market?Different types of markets: • consumers • industrial • resellers Approaches to the • government market – see fig 13.3Requirements for successful segmentation: • Identifiable and measurable • Substantial • Accessible • Responsive
Customer Markets International Consumer Markets Markets Company CompanyGovernment Business Markets Markets Reseller Markets
Requirements forEffective SegmentationMeasurableMeasurable • Size, purchasing power, profiles of segments can be measured.AccessibleAccessible • Segments must be effectively reached and served.SubstantialSubstantial • Segments must be large or profitable enough to serve.DifferentialDifferential • Segments must respond differently to different marketing mix elements & actions.ActionableActionable • Must be able to attract and serve the segments.
Bases for segmentation Demographic – Who they are Geographic – Where they are Psychographic – What they think they are Behavioural – How do they behaveAll of the above determine the consumer profile – draw a picture Targeting and positioning
Bases for Segmenting Consumer MarketsGeographic Nations, states, regions or cities, density Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioral Occasions, benefits, uses, or responses
The marketing instruments – Product (cont.) New Product Development Process Develop new ideas Screen ideas Eliminate non viable ideas Develop product Develop strategy Test marketing Commercialisation
Classification of ProductConvenience Products Shopping Products> Buy frequently & immediately > Buy less frequently> Low priced > Gather product information> Many purchase locations > Fewer purchase locations> Includes: > Compare for: • Staple goods • Suitability & Quality • Impulse goods • Price & Style • Emergency goodsSpecialty Products Unsought Products> Special purchase efforts > New innovations> Unique characteristics > Products consumers don’t> Brand identification want to think about> Few purchase locations > Require much advertising & personal selling
The marketing instruments (mix)3. Distribution Type of channel Channel leadership Market coverage Physical distribution Refer to box on page 326
Consumer Marketing Channels & LevelsChannel Level - A Layer of Intermediaries that Perform Some Work inBringing the Product and it’s Ownership Closer to the Buyer.Channel 1 Direct Direct M M C CChannel 2 Indirect Indirect M M R R → C CChannel 3 M M → W W R R → C CChannel 4 M M → W W → W W → R R → C C
The marketing instruments (mix)4. Marketing communication to inform, persuade and remind advertising personal selling sales promotion publicity
The MarketingCommunications Mix Any Paid Form of Nonpersonal Any Paid Form of Nonpersonal Advertising Advertising Presentation by an Identified Presentation by an Identified Sponsor. Sponsor. Personal Selling Personal Selling Personal Presentations by a Firm’s Sales Force. Sales Promotion Short-term Incentives to Encourage Sales. Building Good Relations with Public Relations Various Publics by Obtaining Favorable Unpaid Publicity. Direct CommunicationsDirect Marketing With Individuals to Obtain an Immediate Response.
Product Life Cycle Sales and Profits Over the Product’s Life From Introduction to DeclineSales andProfits ($) Sales Profits Time Product Introduction Growth Maturity Decline Develop- mentLosses/Investments ($)
Marketing Planning and Control Planning o Strategic planning o Functional planning Control o Set objectives o Measure performance o Evaluate performance o Take corrective action
Public Relations A deliberate, planned and sustainedprocess of communication between a business and its internal and external publics. Its purpose is obtaining, maintaining and/or improving good relations and understanding.Developed from:ManipulationInformationMutual influence
What is Public Relations?•Building good relations with the company’svarious publics by obtaining favorable publicity,building up a good “corporate image” andhandling or heading off unfavorable rumors,stories and events.•Major functions are: – Press Relations – Product Publicity – Public Affairs – Lobbying – Investor Relations –Development
Major Public RelationsTools Web SiteWeb Site Public Public Service Service News Activities News ActivitiesCorporateCorporate Identity IdentityMaterials Materials Speeches Speeches Audiovisual Audiovisual Special Special Materials Materials Events Events Written Written Materials Materials
Public Relations Management 1. Planning o Scanning the environment o Setting objectives 2. Organising oOrganisational structure oOutside consultants 3. Leading oEstablish corporate culture 4. Evaluation and control
Publicity• Methods of obtaining publicity: Unique special events Unique communication messages News releases Sponsorships• Social responsibility and business ethics• Areas of social responsibility: Consumers Suppliers Competitors Employees Owners and shareholders The community