Learning Objectives What is Marketing? What is the marketing mix? What is branding? What is public relations (PR) What is advertising? What is the role of ethics in advertising?
Definition:Marketing is the process of identifyingHuman needs and producing products And services to satisfy them
Marketing Strategy A plan setting out how a business will identify and satisfy customer needs
Marketing Strategy Gap in market/ Product Target Market Marketing MixMarket Segments positioning
Marketing StrategyAnalysing the market1. Market Segmentationo Market Segment/ Niche: Group of peoplein which the product satisfies a similarneed.o Different needs require differentmarketing approacheso Demographic segmentation – age/income/ sex/ social classo Psychological segmentation – attitudes/tastes
2. Target Marketo Target Market – Group of customers atwhich to aim a specific producto Characteristics – Age Gender Income level Lifestyle needs
3. Research – Product Positioningo Product Positioning- Creating an imageof the product in the customers mind.
Homework Pg 307 AnswersQ.1Name: Cost EffectiveExplain: Having an effective marketing concept inplace saves a business money in the long termbecause instead of spending huge amounts ofmoney on what they can make they identifyconsumer needs first and then develop the productExample: ipadName: Time ManagementExplain: Instead of spending time developingproducts businesses use their time moreeffectively by researching consumer needs andthen develop the productsExample: Pepsi Max
Q.2Niche Market: A niche market is a smallmarket segment in which a specific product orservice meets a small group of consumerneeds.Example: Bridal shoesQ.3Product positioning: This is when a businesscreates an image of the product in theconsumer’s mind.Example: Pepsi Max – Male segment ‘macho’image
ProductCore Product – Main Function Augmented Product- Extras to help sell it. e.g. packaging/ guarantee USP - Feature distinguishing it from competitors
Product Design and qualityFunction: Product must do what is supposedto do to satisfy target market core needs.Form: Product must satisfy augmented needsIn terms of extras. E.g. Image/ Style
1. Introduction: Product is launched. Sales are slow. Focus on distribution – widespread availability Advertising is key2. Growth: Advertising leads to increase in sales Focus on production & quality control to meet demand 3. Maturity: Rate of increase in sales slows Find ways to update product/ provide sales promotion techniques R&D of new products commences
4. Saturation: Sales have levelled off. Target markets are already buying the product Can only increase sales by taking competitor’scustomers New sales promotion techniques/ advertising/ R&Dneeded5. Decline: Supply of product is greater then the demand of it Attempts to minimise costs by reducing spending onadvertsing to earn as much profit as possible. * Coke Life cycle
PackagingProtection – from damage during distributionPresentation- Attractive to purchaseInformation- Contains info about the productIdentity- Easily recognisable by consumers
BrandDefinition: is a product name which hasbeen registered with the controller ofPatents, Designs and Trade Marks and isprotected against copying by competitors.
Patent:o Is legal protection for a productor process.o Must register product withpatent office.o The patent holder hasexclusive rights to their productfor 10 years
Trade mark:o A sign representing a product/service and can be recognisedevery where.o Name/ Slogan/ Logo/ Colour/Sound
Advantages of Brands 1. Identity: Makes the product more recognisable2. Differentiation: Shows the differences that existsCompared to competitors products 3. Loyalty: Brand satisfaction develops trust in Consumers and they become loyal to that brand4. New products: An established brand makesIt easier for the business to introduce new productsInto the market
Own BrandsDefinition: Brands registered by retailers
Benefits of own brands• The Retailer: Buys products more cheaply as manufacturer is not advertising• Consumers: Purchase cheaper products where the quality is expected to be at a minimum standard• Producers: Get the products out to supermarket shelves without any marketing costs.
PriceCharacteristics:•Profit: Price must be set high enough to covercosts but make a profit•Sales/ Demand: Lower the price = Higher thesales = higher profits•Image: High price – good quality ; Low price –lower quality
Pricing strategies1. Mark-up pricing: adding a % (mark-up) to the cost of the product and sell it at that price2.Premium pricing: High price reflecting high quality, Give impression of superior quality3. Price Skimming: High price to cover high costs of developing new product.
4. Penetration pricing: Low price to enter highly competitive market to gain market share5. Predatory pricing: Very low price to drive competitors out of the market. Can lead to ‘price war’6. Price discrimination: Charging different prices to different market segments for the same product.
Place• Getting products to consumers!• Channels of distribution: route involved in getting product from producer to consumer.
AStep 1: Wholesalers buy in bulk from the producerStep 2: They store goods in warehouses and sell them on to retailersStep 3: Retailers sell the goods in smaller quantities to consumers
Advantages to producer Disadvantages to producer1. Producers sell off stock in large 1quantities & pass off responsibilityof ‘breaking bulk’
BStep 1: Large retailers purchase directly from manufacturersStep 2: Retailers sell goods at cheaper price to consumersOwn brand products are also produced for these retailers and online retailers
Advantages to producer Disadvantages to producer1. Distribution simplified 1. Large retailers expect largebecause wholesaler is discounts for selling thebypassed producers stock reducing their profit margin2. Using large retailers meansproducers can reach a massmarket
CStep 1: Agents receive goods and sell them on behalf of the producersStep 2: The agent earns commission on goods sold
Advantages to producer Disadvantages to producer1. Wholesaler and retailer are 1. Difficult to reach massbypassed so profit margin marketincreased
D Producers sell directly to their customersAdvantages to producer Disadvantages to producer1. Bypass other intermediaries 1. High focus on attractingallowing for increased profit customers instead of mainmargins focus on product itself2.Develop good customerrelationship
Target marketEase of transport Factors influencing Distribution Payment Product Image methods
PromotionThe way a business influences the target market to purchase their products` How?
AdvertisingAdvertising is the science of creating and placingmedia that Interrupts the consumer and then gets him or her to take some Action.
Functions of AdvertisingInformative:Providing information about thefunction of the product/service.Persuasive:Convincing consumers of thedesirability and the benefits that set aparticular product apart from thecompetition.
Generic:Promote the sale of a product but not aparticular brandCompetitive:Comparing brands with each othershowing why their product/service is betterE.G. Supervalu v Lidl & AldiReminder:General adverts showing brands
E-commerce:•Selling goods or services over theinternet is called e-commerce or e-business.•The ‘e’ stands for ‘electronic’•B2C is used to identify sales froma business directly to consumers.• B2B indicates sales from onebusiness to another.
Social media:•Also known as social networking and refers to arange of internet technologies that enable peopleto communicate and socialise online.• Users can combine text, video and audio tocreate online messages, podcasts and statusupdates.•E.G.S Facebook, Twitter and their increasingpopularity in providing businesses with anopportunity to reach members of their targetmarket.
Answers Question 31. Identity: Makes the product more recognisable2. Differentiation: Shows the differences that exists compared to competitors products3. Loyalty: Brand satisfaction develops trust in consumers and they become loyal to that brand4. New products: An established brand makes It easier for the business to introduce new products Into the marketQuestion 61. Target market: This will influence whether the price will be set high or low taking into consideration their characteristics e.g age, income levels2. Cost of production: A price must be set to cover the costs of producing the goods3. Demand: The higher the demand for the product the higher the selling price4. Product positioning: The image that the business are trying to portray to the public will effect pricing strategy. E.g. premium pricing.
Question 7:In the channel of distribution there can be two intermediariesbetween the producer and the consumer. These are thewholesaler and the retailer.Benefits of intermediaries:• The wholesaler/ Retailer buys in bulk from the producer so theybecome the ones responsible for ‘breaking bulk’.• They incur the costs of transport and advertising to the consumer•Allows distribution of products to a mass market. Increasingsales, increasing profitsBenefits of selling directly to consumer:• Earns extra profit for the producer because they can chargehigher price to the consumer as wholesaler and retailer are nottaking a cut•Consumers can custom order goods to their specifications•Develop positive relationship with the consumers increasingcustomer loyalty
How to execute an advertising campaignStep 1: Analyse•Collect & analyse market researchof market segments and targetmarketStep 2: Plan•Identify aims of advert•Decide budget of adverting•Decide on media mix to be used•Evaluate cost effectiveness
Step 3: Implement• Design adverts• Produce adverts• Book advert slots• Decide on timing to showcase adverts to maximiseimpactStep 4: Review• Effects on sales levels• Effects on consumer attitudes – market research• Make improvements
Laws in AdvertisingASAI- Advertising Standards Authorityin IrelandAds must be: Legal Decent Honest Truthful
Office of Director of Consumer Affairs Withdraws false / misleading ads Prosecutes sellers who use false/misleading ads
Sales Promotion• Offers consumers an incentive to buy product/ service• Used at Introduction, maturity saturation and decline phases• Aim: Switch brands – build loyalty
Direct Marketing• Identifies list of potential customer• Sends them promotional material & special offers by email/ letters• ‘Junk mail’
Aim: To create and maintain agood image of the firm & itsproductsPRO: Public relations officer
How?Press Relations: News items about thecompanyPress conference: Meetings arranged bythe company, reporters can ask questionsSponsorships: Arrangement where thecompany pays money so that theircompany name/ logo can be associatedwith that event/ team
Charity donations: Good for image of the business.
Question Evaluate the elements of the marketing mix, using a product or service of your choice. (30 Marks)Solution:Choose productStep 1: Define Marketing Mix & benefit of planning it.Step 2: Product - Core/ augmented/ USP - Design - Brand – benefits of brand name - Product life cycle –Maturity stageStep 3: Price - What will price effect - Price strategy – why choose thisStep 4: Place - Define Chanel of Distribution - Choose channel; Id benefits of itStep 5: Promotion - Define - Benefits of PR - Choose medium – Link to target market