2. Contents
1. Marketing Mix and Key Marketing Activities
2. Developing Market Segmentation
3. Product Planning and Development
4. Promotion Mix : Advertising, Publicity, Personal
Selling and Sales Promotion
5. Distribution Planning and Pricing Strategy
If you find this presentation useful, please consider telling
others about our site (www.studyMarketing.org)
www.studyMarketing.org 2
7. Key Marketing Activities
Examination and evaluation of consumer
Consumer Analysis characteristics, needs, and purchase
processes
Development and maintenance of products,
Product Planning product assortments, product positions,
brands, packaging, options, and deletion of
old products
Outlines price ranges and levels, pricing
Price Planning techniques purchase terms, price
adjustments, and the use of price as an
active or passive factor
www.studyMarketing.org 7
8. Key Marketing Activities
Establishment of channel relations, physical
Distribution
distribution, inventory management,
Planning warehousing, transportation, allocation of
goods, and wholesaling
Promotion Combination of advertising, publicity,
Planning personal selling, and sales promotion to
drive sales revenue
www.studyMarketing.org 8
9. Product/Market Matrix
Existing Products New Products
Market
Market Product
Product
Existing Markets Penetration Development
Penetration Development
Market
Market Diversification
Diversification
New Markets Development
Development
www.studyMarketing.org 9
10. Product/Market Matrix
Market • The firm seeks to achieve growth with
Market
Penetration existing products in their current market
Penetration
segments, aiming to increase its market
share
• Effective when the market is growing or not
yet saturated
Market
Market • The firm seeks growth by targeting its
Development
Development existing products to new market segments
• Effective when a local or regional business
looks to wider its market, new market
segments are emerging due to changes in
consumer life-style/demographics, and
innovative uses are discovered for a mature
product 10
www.studyMarketing.org
11. Product/Market Matrix
Product • The firms develops new products
Product
Development
Development targeted to its existing market segments
• Effective when the firm has a core of
strong brands
Diversification • The firm seeks growth by targeting its
Diversification
existing products to new market
segments
• Diversification is utilized so that the
firm does not become overly depend-
ent on one product line
www.studyMarketing.org 11
12. Market Segmentation
Market The division of a market into
Segment different homogeneous groups of
consumers
Should be:
• measurable
• accessible by communication and distribution
channels
• different in its response to a marketing mix
• durable (not changing too quickly)
• substantial enough to be profitable
www.studyMarketing.org 12
13. Types of Market Segmentation
Based on regional variables such as
Geographic region, climate, population density, and
population growth rate.
Based on variables such as age, gender,
Demographic ethnicity, education, occupation, income,
and family status
www.studyMarketing.org 13
14. Types of Market Segmentation
Based on variables such as values,
Psychographic attitudes, and lifestyle
Based on variables such as usage rate
Behavioral and patterns, price sensitivity, brand
loyalty, and benefits sought
www.studyMarketing.org 14
15. Step in Planning A Segmentation Strategy
Determining Analyzing Developing
characteristics and consumer consumer
needs of consumers similarities and group
for the product differences profiles
category of the
company
Selecting Positioning Establishing
consumer company’s an
segment (s) offering in appropriate
relation to marketing
competition. plan
www.studyMarketing.org 15
17. Products : Types of Goods
Convenience
Goods
Types of Shopping
Goods
Goods
Specialty
Goods
www.studyMarketing.org 17
18. Convenience Goods
• Those purchased with a minimum of effort,
Convenience because the buyer has knowledge of
Goods product characteristics prior to shopping
• The consumer does not want to search for
additional information (because the item
has been bought before) and will accept a
substitute rather than have to frequent
more than one store
www.studyMarketing.org 18
19. Convenience Goods
• Staples are low-priced items that are
Convenience routinely purchased on a regular basis,
Goods such as detergent, milk, and cereal
• Impulse goods are items that the
consumer does not plan to buy on a
specific trip to a store, such as candy, a
magazine, and ice cream
• Emergency goods are items purchased
out of urgent need, such as an umbrella
during a rainstorm, a tire to replace a flat,
or aspirin for a headache
www.studyMarketing.org 19
20. Shopping Goods
• Those for which consumers lack
Shopping
sufficient information about product
Goods
alternatives and their attributes, and
therefore must acquire further
knowledge in order to make a
purchase decision
www.studyMarketing.org 20
21. Shopping Goods
• For attribute-based shopping goods,
Shopping consumers get information about and then
Goods evaluate product features, warranty,
performance, options, and other factors.
The goods with the best combination of
attributes is purchased. Sony electronics
and Calvin Klein clothes are marketed as
attribute-based shopping goods
• For price-based shopping goods,
consumers judge product attributes to be
similar and look around for the least
expensive item/store
www.studyMarketing.org 21
22. Specialty Goods
• Those to which consumers are brand
Specialty loyal.
Goods • They are fully aware of these products
and their attributes prior to making a
purchase decision.
• They are willing to make a significant
purchase effort to acquire the brand
desired and will pay a higher price than
competitive products, if necessary.
• For specialty goods, consumers will not
make purchases if their brand is not
available. Substitutes are not
acceptable.
www.studyMarketing.org 22
23. Services
Rented-
goods
Service
Type of Owned-goods
service
Services
Non-goods
www.studyMarketing.org 23
24. Services
Rented- Involves the leasing of a good for a specified
period of time. Examples include car, hotel room,
goods
apartment, and tuxedo rentals
Service
Involves an alteration or repair of a good owned by
Owned-goods the consumer. Examples include repair services
service (such as automobile, watch, and plumbing), lawn
care, car wash, haircut, and dry cleaning
Provides personal service on the pan of the seller;
Non-goods it does not involve a goods. Examples include
accounting, legal, and consulting services
www.studyMarketing.org 24
25. Characteristics of Services
• The intangible nature of many services makes the
consumer's choice more diffi-cult than with goods
• The producer and his or her services are often
inseparable
• The perishability of services prevents storage and
increases risks
• Service quality may be variable
www.studyMarketing.org 25
26. Product Life Cycle
Growth Maturity
Introduction Decline
www.studyMarketing.org 26
27. Product Life Cycle
Characteristics Introduction Growth
Marketing objective Attract innovators and Expand distribution and
opinion leader to new product line
product
Industry sales Increasing Rapidly increasing
Competition None or small Some
Industry profits Negative Increasing
Customers Innovators Affluent mass market
Product mix One or two basic Expanding line
models
Distribution Depends on product Rising number of
outlets
Pricing Depends on product Greater range of prices
Promotion Informative Persuasive
www.studyMarketing.org 27
28. Product Life Cycle
Characteristics Maturity Decline
Marketing objective Maintain differential (a) cut back,
advantage as long as (b) revive,
possible (C) terminate
Industry sales Stable Decreasing
Competition Substantial Limited
Industry profits Decreasing Decreasing
Customers Mass market Laggards
Product mix Full product line Best-sellers
Distribution Greatest number of Decreasing number of
outlets outlets
Pricing Full line of prices Selected prices
Promotion Competitive Informative
www.studyMarketing.org 28
29. New Product Planning
Idea Product Concept Business
Generation Screening Testing Analysis
Product Test Commercial-
Development Marketing ization
www.studyMarketing.org 29
30. New Product Planning
• A continuous, systematic search for new
Idea
product opportunities
Generation
• It involves delineating sources of new
ideas and methods for generating them
• After the firm identifies potential
Product products, it must screen them
Screening • Many companies use a new-product
screening checklist for preliminary
evaluation
www.studyMarketing.org 30
31. Screening Checklist
GENERAL CHARACTERISTICS OF NEW PRODUCTS
Profit potential
Existing competition
Potential competition
Size of market
Level of investment
Patentability
Level of risk
MARKETING CHARACTERISTICS OF NEW PRODUCTS
Fit with marketing capabilities
Effect on existing products (brands)
Appeal to current consumer markets
Potential length of product life cycle
Existence of differential advantage
Impact on image
Resistance to seasonal factors
PRODUCTION CHARACTERISTICS OF NEW PRODUCTS
Fit with production capabilities
Length of time to commercialization
Ease of product manufacture
Availability of labor and material resources
Ability to produce at competitive prices
www.studyMarketing.org 31
32. New Product Planning
• Concept testing presents the consumer with
a proposed product and measures attitudes
Concept
and intentions at this early stage of
Testing
development
• Concept testing is a quick and inexpensive
way of measuring consumer enthusiasm
• Business analysis for the remaining product
Business concepts is much more detailed than product
screening
Analysis
• Because the next step is expensive and time-
consuming product development, critical use
of business analysis is essential to eliminate
www.studyMarketing.org marginal items 32
33. Business Analysis Variables
Factors Considerations
Demand projections Price/sales relationship; short- and long-run sales potential;
speed of sales growth; rate of repurchases; channel intensity
Cost projections Total and per unit costs; use of existing facilities and
resources; startup vs. continuing costs; estimates of future
raw materials and other costs; econo-mies of scale; channel
needs; break-even point
Competition Short-run and long-run market shares of company and
competitors; strengths and weaknesses of competitors;
potential competitors; likely competitive strategies in
response to new product by firm
Required investment Product planning (engineering, patent search, product
development, testing); promotion; production; distribution
Profitability Time to recoup initial costs; short- and long-run total and per-
unit profits; control over price; return on investment (ROI)
www.studyMarketing.org 33
34. New Product Planning
• Product development converts a product idea
Product into a physical form and identifies a basic
Development marketing strategy
• It involves product construction, packaging,
branding, product positioning, and attitude and
usage testing.
• Test marketing involves placing a product for
Test sale in one or more selected areas and
Marketing observing its actual performance under the
proposed marketing plan.
• The purpose is to evaluate the product and
pretest marketing efforts in a real setting prior
www.studyMarketing.org to a full-scale introduction 34
35. New Product Planning
• After testing is completed, the firm is ready
Commercial- to introduce the product to its full target
ization market. This is commercialization and
corresponds to the introductory stage of the
product life cycle
• Commercialization involves implementing a
total marketing plan and full production
www.studyMarketing.org 35
36. Promotion Mix :
Advertising, Publicity, Personal
Selling and Sales Promotion
www.studyMarketing.org 36
38. Promotion Mix
Factor Advertising Publicity Personal Selling Sales Promotion
Audience Mass Mass Small (one-to-one) Varies
Message Uniform Uniform Specific Varies
Cost Low per viewer or None for media space High per customer Moderate per
reader and time; can be customer
moderate costs for
press releases and
publicity materials
Sponsor Company No formal sponsor in Company Company
that media are not
paid
Flexibility Low Low High Moderate
Control over content High None High High
and placement
Credibility Moderate High Moderate Moderate
Major goal To appeal to a mass To reach a mass To deal with individual To stimulate short-run
audience at a audience with an consumers, to resolve sales, to increase
reasonable cost, and independently questions, to close impulse purchases
create awareness and reported message sales
favorable attitudes
Example Television ad for a Newspaper article Retail sales personnel A Kodak video camera
Kodak video camera reporting on the explaining how a displayed at consumer
unique features of a Kodak video camera photography shows
Kodak video camera works
www.studyMarketing.org 38
39. Four Key Steps to Advertise
Determine
message content
and devise an ad
Specify the
location of an ad
(media placement)
Choose how many
Outline a promotion
variations of a
schedule
basic message to
utilize
www.studyMarketing.org 39
40. Things to Consider in Advertising
Waste is the portion of an audience that is
Waste not in a firm's target market. Because
media appeal to mass audiences, waste
is a significant factor in advertising.
Reach refers to the number of viewers or
Reach readers in the audience
www.studyMarketing.org 40
41. Things to Consider in Advertising
Frequency is how often a medium can be
Frequency used. It is greatest for newspapers, radio, and
television, where ads may appear daily and
advertising strategy may be easily changed
Message permanence refers to the number
Message
of exposures one advertisement generates
permanence
and how long it remains with the audience
www.studyMarketing.org 41
42. Things to Consider in Advertising
Persuasive impact is the ability of a medium
Persuasive to stimulate consumers. Television often has
impact
the highest persuasive impact because it is
able to combine audio, video, color, animation,
and other appeals.
Clutter Clutter involves the number of ads that are
contained in a single program, issue, etc. of a
medium. Clutter is low when a limited number
of ads is presented and high when many ads
are presented.
www.studyMarketing.org 42
43. Publicity : Poor and Good Response
Situation Poor Response Good Response
Fire breaks out in Requests for information by Company spokesperson explains the cause
a company plant media are ignored. of the fire and company precautions to avoid
it and answers questions.
New product Advertising is used without Preintroduction news releases, product
introduced publicity samples, and testimonials are used.
News story about Requests for information by media Company spokesperson states that tests are
product defects are ignored, blanket denials are being conducted on products, describes
issued, hostility is exhibited toward procedure for handling defects, and answers
reporter of story. questions.
Competitor The advertising campaign is Extensive news releases, statistics, and
introduces new stepped up. spokespeople are made available to media to
product present company's competitive features.
High profits Profits are rationalized and positive Profitability is explained, data (historical and
reported effects on the economy are cited. current) are provided, uses of profits are
detailed: research, community development.
Overall view of There is an infrequent need for There is an ongoing need for publicity, strong
publicity publicity; crisis fighting is used planning, and contingency plans for bad
when bad reports are circulated. reports.
www.studyMarketing.org 43
44. Developing a Publicity Plan
Setting Outlining
objectives types of
publicity
Creating
Selecting
publicity
media
messages
Timing
publicity
messages
www.studyMarketing.org 44
45. Publicity Type
Publicity Type Example
News publicity Macy's describes its decision to sell its stores in the Midwest.
Business feature article Toyota explains its goals and objectives for the 2020.
Service feature article A trade association offers 10 tips on how to reduce home heating
costs.
Finance release General Electric distributes quarterly financial data about the
company.
Product release Intel announces its new, fastspeed microprocessor
Pictorial release Apple distributes photos showing all of its personal computer
products and related software
Background editorial Mc Kinsey presents a biography of its president and his rise
release through the company.
Emergency publicity The Red Cross makes a request for aid to tornado victims.
www.studyMarketing.org 45
46. Specific Personal Selling Objectives
Type of Objective Illustrations
Demand-Oriented
Information To fully explain all good and service attributes
To answer any questions
To probe for any further questions
Persuasion To clearly distinguish good or service attributes from those of competitors
To maximize the number of sales as a per cent of presentations
To convert undecided consumers into buyers
To sell complementary items, e.g., film with a camera
To placate dissatisfied customers
Reminding To ensure delivery, installation, etc.
To follow up after a good or service has been purchased
To follow up when a repurchase is near
To reassure previous customers when making a new purchase
Image-Oriented
Industry and company To maintain a good appearance by all personnel in contact with consumers
To follow acceptable sales practices
www.studyMarketing.org 46
47. Personal Selling Process
Prospecting Approach Customer
(blind, lead) Wants
Sales Answering
Presentation Questions
(questions and
objections)
Follow up
Close (satisfaction,
referrals,
repurchase)
www.studyMarketing.org 47
48. Types of Sales Promotion
Type Characteristics Illustration
Coupons Manufacturers or retailers advertise P&G mails consumers a 25cents
special discounts for customers who off coupon for Sure deodorant,
redeem coupons. which can be redeemed at any
supermarket.
Refund or A consumer submits proofof First Alert home fire alarms
rebate purchase (usually to the provides $5 rebates to consumers
manufacturer) and receives an extra submitting proof of purchase.
discount.
Samples Free merchandise or services are When Sunlight dishwashing liquid
given consumers, generally for new was introduced, free samples were
items. mailed to consumers.
Contests or Consumers compete for prizes by Publishers Clearinghouse sponsors
sweepstakes answering questions (contests) or annual sweepstakes and awards
filling out forms for random drawings automobiles, houses, and other
of prices (sweepstakes). prices.
www.studyMarketing.org 48
49. Types of Sales Promotion
Type Characteristics Illustration
Bonus or Consumers receive discounts Some stores run Icent sales,
multipacks for purchasing in quantity whereby the consumer buys one
item and gets a second one for a
penny.
Point-of- Instore displays remind Chewing gum sales in
purchase customers and generate supermarkets are high because
displays impulse purchases. displays arc placed at checkout
counters.
Special Manufacturers or retailers Virtually every major league
events sponsor celebrity appearances, baseball team has an annual "Old
fashion shows, and other Timers' Day," which attracts large
activities. crowds.
Gifts Consumers are given gifts for Savings banks offer a range of
making a purchase or opening gifts for consumers opening new
a new account. accounts or expanding existing
ones.
www.studyMarketing.org 49
50. Sales Promotion Advantages
• It helps attract customer traffic and maintain brand or store
loyalty
• Quick results can be achieved
• Some forms of sales promotion (calendars, tshirts. Pens,
etc) provide value to the consumer and are retained by
them; and these forms can provide a reminder function
• Impulse purchases can be increased through instore
displays
www.studyMarketing.org 50
51. Sales Promotion Disadvantages
• The image of the firm may be lessened if it continuously runs
promotions. Consumers may view discounts as representing a
decline in product quality and believe the firm could not sell its
offerings without them.
• When coupons, rebates, or other special deals are used
frequently, consumers may not make purchases if the items are
sold at regular prices. Instead, they will stock up each time there
is a promotion.
www.studyMarketing.org 51
52. Sales Promotion Disadvantages
• Sometimes sales promotions shift the focus away from the
product onto secondary factors. Consumers may be attracted by
calendars, coupons, or sweepstakes instead of by product
quality, functions, and durability. In the short run this generates
consumer enthusiasm. In the long run this may have adverse
effects on a brand's image and on sales, because a product
related differential advantage has not been developed.
www.studyMarketing.org 52
54. Distribution Planning
• Distribution planning is systematic decision making
regarding the physical movement and transfer of
ownership of a product from producer to consumer.
• It includes transportation, storage, and customer
transactions.
• Distribution functions are carried out through a channel of
distribution, which is comprised of all the organizations or
people involved in the process.
• These organizations or people are known as channel
members or middlemen.
www.studyMarketing.org 54
55. Intensity of Channel Coverage
Characteristics Exclusive Selective Intensive
Distribution Distribution Distribution
Objectives Prestige image, Moderate market Widespread
channel control and coverage, solid market coverage,
loyalty, price image, some channel
stability and high channel control and acceptance, sales
profit margins loyalty, good sales volume and profits
and profits
Channel Few in number, Moderate in number, Many in number,
members wellestablished wellestablished, all types
reputable stores better stores of outlets
Customers Few in number, Moderate in number, Many in number,
trend setters, brand conscious, convenience
willing to travel to somewhat willing to oriented
store, brand loyal travel to store
www.studyMarketing.org 55
56. Intensity of Channel Coverage
Characteristics Exclusive Selective Intensive
Distribution Distribution Distribution
Marketing Personal selling, Promotional mix, Mass
Emphasis pleasant pleasant shopping advertising,
shopping conditions, good nearby location,
conditions, good service items in stock
service
Major Limited sales May be difficult to Limited channel
Disadvantages potential carve out a niche control
Examples Automobiles, Furniture, Groceries,
designer clothes, clothing, watches household
caviar products,
magazines
www.studyMarketing.org 56
57. Methods of Channel Cooperation
Factor Manufacturer Action Channel Member Action
New-product Thorough testing, adequate Good shelf location and
introduction promotional space, enthusiasm for
support product, assistance in test
marketing
Delivery Prompt filling of orders, adherence to Proper time allowed for
scheduled dates delivery, shipments
immediately checked for
accuracy
Promotion Sales force training, sales force Attractive instore displays,
incentives, development of national knowledgeable salespeople,
advertising campaign, cooperative participation in cooperative
programs programs
Product Product guarantees Proper installation and
quality servicing of products
www.studyMarketing.org 57
58. Pushing and Pulling Strategy
Pushing Strategy Pulling Strategy
Manufacturer
Manufacturer Manufacturer
Manufacturer
Channel
Channel Channel
Channel
members
members members
members
Consumers
Consumers Consumers
Consumers
www.studyMarketing.org 58
59. Price Planning
Represents the value of a
Represents the value of a
good or service for both the
good or service for both the
A Price
A Price seller and the buyer
seller and the buyer
Systematic decision making
Systematic decision making
Price
Price by an organization regarding
by an organization regarding
Planning
Planning all aspects of pricing
all aspects of pricing
www.studyMarketing.org 59
60. Factors Affecting Pricing Decisions
Consumers Competitors Cost
Channel
Government
Members
Total Effects
on Price
Decisions
www.studyMarketing.org 60
61. Consumers and Price Decisions
• The relationship between price and
consumer purchases and perceptions is
Consumers
explained by two economic principles —
the law of demand and price elasticity of
demand
• The law of demand states that consumers
usually purchase more units at a low price
than at a high price
• The price elasticity of demand defines the
sensitivity of buyers to price changes in
terms of the quantities they will purchase
www.studyMarketing.org 61
62. Consumers and Price Decisions
Elastic • Elastic demand occurs if relatively small changes in
Elastic
price result in large changes in quantity demanded
Demand
Demand
• Numerically, price elasticity is greater than 1
• With elastic demand, total revenue goes up when
prices are decreased and goes down when prices rise
In-elastic • Inelastic demand takes place if price changes have
In-elastic
little impact on quantity demanded
Demand
Demand
• Price elasticity is less than 1
• With inelastic demand, total revenue goes up when
prices are raised and goes down when prices decline
www.studyMarketing.org 62
63. Consumers and Price Decisions
Unitary
Unitary • Unitary demand exists if changes in price are
Demand exactly offset by changes in quantity demanded,
Demand
so that total sales revenue remains constant.
• Price elasticity is 1
www.studyMarketing.org 63
64. Competitors and Price Decisions
• Another element contributing to the
Competitors degree of control a firm has over
prices is the competitive environment
within which it operates
www.studyMarketing.org 64
65. Competitors and Price Decisions
Market-
Market- • Characterized by a high level of com
controlled
controlled petition, similar goods and services, and
price
price little control over price by individual
environment
environment companies
Company-
Company- • Characterized by moderate competition,
controlled
controlled welldifferentiated goods and services, and
priced
priced strong control over price by individual firms
environment
environment
www.studyMarketing.org 65
66. Competitors and Price Decisions
Government-
Government- • Characterized by prices set by the
controlled
controlled government. Examples are public utilities,
price
price buses, taxis, and state universities
environment
environment
www.studyMarketing.org 66
67. Channel Members and Price Decisions
• A wholesaler or retailer can gain stronger
Channel control over price by stressing its importance as
Members a customer to the manufacturer, refusing to
carry unprofitable product, stocking competitive
items, and developing strong dealer brands so
that consumers are loyal to the seller and not
the manufacturer
• Sometimes retailers engage in selling against
the brand, whereby they stock merchandise,
place high prices on it, and then sell other
brands for lower prices. This is often done to
increase the sales of their own brands
www.studyMarketing.org 67
68. Channel Members and Price Decisions
• To ensure channel member cooperation with
Channel price decisions, the manufacturer needs to
Members consider four factors: channel member profit
margins, price guarantees, special deals, and
the impact of price increases
www.studyMarketing.org 68
69. Government and Price Decisions
Price fixing regulations
Price fixing regulations
Prohibitions against price
Prohibitions against price
discrimination among
discrimination among
Government channel members
channel members
Unfair sales acts ::
Unfair sales acts
predatory pricing
predatory pricing
www.studyMarketing.org 69
70. Cost and Price Decisions
Cost of raw
Cost of raw
Cost materials and
materials and
supplies
supplies
Labor cost
Labor cost
Pricing
Decisions
Advertising Cost
Advertising Cost
Distribution Cost
Distribution Cost
www.studyMarketing.org 70
72. Price Strategy
With a cost-based price strategy, the
Cost-based Price marketer sets prices by computing
Strategy merchandise, service, and overhead
costs, and then adding the desired profit
to these figures
The marketer sets prices after
Demand-based researching consumer desires and
Price Strategy ascertaining the range of prices
acceptable to the target market
www.studyMarketing.org 72
73. Price Strategy
• The marketer sets prices in
Competition-
accordance with competitors
based Price
Strategy • Prices may be below the market, at
the market, or above the market,
depending on customer loyalty,
services provided, image, real or
perceived differences between
brands or stores, and the
competitive environment
www.studyMarketing.org 73
74. Recommended Further Readings
1. Joel Evans and Barry Berman, Marketing, Prentice Hall
2. Phillip Kotler, Marketing Management, Prentice Hall
www.studyMarketing.org 74
