Module 2.1 - Marketing mix 2

Module 2.1.
Practical marketing tools for social
enterprises
Ing. Iveta Brouckova, Ph.D
RERA - Regional Development Agency of South Bohemia
CZECH REPUBLIK
2018
2018
Project co-funded by the European
Union funds (ERDF and IPA)

Marketing mix recap
Marketing mix constists of four elements – 4P
• Product
• Price
• Place
• Promotion (marketing communication)
Marketing mix is the most important foundation on which the company marketing strategy
is based and developed

Place (=Distribution)
A process of product distribution from the manufacturing place to the
selling point
Time- and finance-demanding, complicated (being built over a long
time) but efficient (distribution chain segments influence the consumer
behaviour) element of the marketing mix
Distribution goals:
• Providing customers with demanded products at an accessible
point, at the right time and in quantity they want
• Building distribution channels – overcome time, spatial and
ownership barriers

Distribution steps
Physical distribution
• Includes transportation of goods, storage and storage management
so that the distributor is able to satisfy customer needs
Change of ownership
• The trade exchange enables buyers to make use of goods and
services they need or they want
Auxiliary and support activities
• Support services like market research, advisory service, consumer
loans, transportation insurance etc.

Distribution network players
• Manufacturer
• Distributor (wholesale agents, retail agents, merchants) =
intermediaries
• Support organizations (market research agencies, insurance
companies, banks, solicitors…)
Distribution types
• Direct distribution – no intermediaries involved, direct contact of
the manufacturer and final consumer. With the advance of internet
possibilities and accessibility, many products, mainly services, have
moved from indirect to direct mode
• Indirect distribution – one or more intermediaries between the
manufacturer and final consumer

Direct distribution channel
• The simplest distribution channel with no intermediaries
• Examples:
 Direct sales at the point of production
 Sales in own shops
 Sales in own vending machines
 Sales over internet or catalogue orders
 Sales via travelling salesmen
• Advantages – direct contact with a customer, control over product
handling, lower costs
• Disadvantages – limited market penetration

Indirect distribution channel
• There is one or more intermediaries between the producer and the
customer
• Divided into single-level, dual-level and multi-level distribution
according to the number of intermediaries involved
• Advantages – distribution channel capacity increase leading to
higher ability to satisfy consumer needs, the product is available to
more customers in the right place and at the right time
• Disadvantages – the producer loses control over the product and
loses contact with customers

Promotion (=Marketing communication)
• ‚impossible to not communicate‘ – the product is communicated not
only with words, but with styling, gestures…
• Marketing communication must be mutual, balanced, ethical and
continuous
• Creates a relation between producer and the target group
The goals of the marketing communication:
• to inform
• to convince
• to influence the target group
• to remind of the product

Marketing communication planning
• Target group identification – who is the target group
• Setting goals – what are the primary goals in the given period –
from the product development phase to brand and image building
• Budget – available financial sources determine the selection of
communication techniques
• Creation of communication message – creation of the message
to target group using rational, emotional, positive or moral appeals
• Marketing mix composition – composition of individual items of
marketing mix, e.g. promotion, advertisements, sale support, direct
marketing, public relations, event marketing, online communication

• Assessment
 Assessment of direct effects – e.g. increased sales is possible
with only some tools (sale support, direct marketing), problems
include low evidence ability and the influence of non-related
factors
 Assessment of indirect effects
 Communication media – gathering and evaluation of media
follower structure, frequency of interaction, probability of
media impact, media image etc.
 Communication efficiency
– Market pre-research – at the message creation stage
– Market research – after the product introduction, effect
towards the brand, consumer attitudes, willingness to buy
or behaviour are assessed

Communication mix
• A whole array of tools used for marketing communication
• Combination of the tools according to consumer needs, expectations
and possibilities of the target group is recommended
• Using the tools in a cooperative manner so they work in synergy
• The tools have different impact on relation to the target group (see
image)
– Awareness – raising awareness, attention to the product
– Interest – creating interest in the product
– Desire – creating a desire to have the product
– Purchase – actual sale, desired outcome
– Post-purchase – post-purchase services and maintain good
relation

Advertising
Paid form of impersonal communication with clearly defined source = always paid
service, always make use of communication channels, brand or product promotion
Main goals:
• Increasing brand visibility and influencing attitudes
• Creating and strengthening of brand image
• Creation and further development of market position, especially with new products
• Sales increase – mostly as an auxiliary target to the other tools
Specific form – product placement – inclusion of the product into an art piece or cultural
item
Many existing regulations to advertisement forms, contents and placement
Advantages – almost irreplaceable role in awareness raising, fake popularity effect –
frequently used
Disadvantages – difficult assessment of sales, advertisement overload which leads to
lowered attention and consumer irritation

Sales promotion
Short-term incentives that support impulsive action (purchase)
Added value to the product which motivates customers to act
Main goals:
• Influence on impulsive decision and action rather than attitudes
• Provision of product characteristics directly, creating demand and desire to buy
• Creation or strengthening of product awareness
• Quick sales of seasonal goods, clearing sales of stockpiled goods
• Support of product offerings by intermediaries and sales personnel
Techniques – discounted prices, product testing, gifts, loyalty consumer programmes
Advantages – influence on consumer behaviour, intensified consumer reaction, easy
efficiency assessment
Disadvantages – increased sensitivity to price, perceived quality might be affected,
lowered reference price (no sales without discounts), only temporary effect aimed at
short-term sales results

Public Relations
Based on relation building and communication between the producer and the target group
It is systematic, planned and continuous activity
High involvement of company management
Interest groups
• Internal – employees, management, shareholders, labour unions
• External – media, customers, business partners, government, financial institutions, local
communities, investors etc.
Main goals:
• Information on company activities, image building, creation of long-term positive
perception, finding balance between social and economic goals, lobbying
• Important activities – creation of corporate identity, social communication (social
responsibility, sustainable development), sponsoring, crisis communication, protection of
brand reputation
Advantages – long-term focus, modest financial burden
Disadvantages – no so well perceived, usually attributed to large companies, selection of
good press agent is crucial – wrong choice negatively influences company image

Direct marketing
Also ‚direct and digital marketing‘ – close connection to online communication
Relation based on mutual and interactive communication between the company and the
customer
Main goals:
• Primary goal – to address and convince the target group through personalized and
individual offering caused by the customer activities
• Secondary goal – acquisition of information, building customer database
Techniques – addressed and non-addressed shipment, telemarketing, catalogue and
mail-order sales, customer clubs, mobile marketing etc.
Advantages – efficient communication due to focus on target market segment,
measurable feedback, creation of long-term customer relation, support to customer
loyalty, restricted access to communication by competition
Disadvantages – unfavourable perception by customers, bad timing, unsuitable segment
addressed. All of these can lead to customer aversion due to marketing oversaturation

Personal selling
Based on personal communication, personal negotiations
Personal selling uses B2B (Business-to-business) and B2C (business-to-customer)
markets
Main goals:
• Sales-oriented goals – the main goal is to sell
• Customer-oriented goals – the main goal is to build and maintain long-term relations
Types of personal selling – retail sales, B2B, direct sales
Advantages – high efficiency of sales, immediate feedback, personal relations with
customers, knowledge of customer needs and wishes
Disadvantages – widespread aversion towards personal selling (especially on B2C
level), time limits of a meeting can be perceived as pressure to buy, important role of a
human factor

Event marketing
The message is spread by emotional experience linked to the brand/product
The participation of target group increases brand visibility
Main goals:
• Increase of product and brand popularity, strengthening of positive associations of the
brand, relation building, increased the loyalty of the target group, strengthening of
company image and support of secondary publicity (media informs about the event)
Many diverse forms ranging from indoor events within a closed group to large outdoor
events aiming at the general public. It also includes exhibitions and trade fairs
Advantages – event can be precisely focused on the desired target group, personal
approach, it can be easily combined with other marketing tool leading to synergy
Disadvantages – if it creates negative effect it is not easily remedied, large events are
costly, effects are uncertain and involves risks (weather, too few or too many visitors etc.)

Online communication
Communication with the target group via internet
The internet is used as:
• Communication channel – message spreading, e.g. banner ads, e-mail marketing (spam)
• Sales channel – e-commerce, e-shops, exchange of business documents etc.
• On-line communication – interactive communication with the target group, market
research etc.
Main goals:
• Direct presentation of the company, feedback assessment, interactive communication with
customers
Techniques – web pages, search engine marketing, social media, virtual worlds, online
games, VoIP (e.g. Skype), instant messaging, interactive content
Advantages – precise focusing, content personalization and interactivity, easy monitoring and
assessment, low costs
Disadvantages – ad-blocking software, different software support on different platforms, user
anonymity can support unwanted behaviour and reactions, unsuitable for certain target groups

New trends and techniques in marketing communication
• New media, digital media = computers, tablets, mobile phones,
computer networks, web services
– Media provide content on demand, anywhere and anytime
– Researches claim that 65% of consumers change their view on a
brand due to new media, 96% of consumers were influenced by
new media in decision phase of the purchase
• Urge to share
– People want to share experience and see the experience of
others
– Communication message launched when not expected = higher
impact

Content marketing
• Crucial to publish interesting and valuable content on web pages,
blogs, social media, newsletters etc.
• The goal is to increase recognition of the brand and be different from
the competition
Prosumers (production by customers)
• Consumer is involved in product design, manufacturing or marketing
of the product (crowd-sourcing, crowd-funding)
Right time to address
• Locally focused campaigns gain popularity; according to
researchers, 74% of smartphone owners react to these campaigns
• The customer received a voucher for their smartphone when they
are in proximity to the point of sale

Emotions
• Creation image of how the customers want/do not want to feel –
then linkage to the brand
• Emotions are heavily used in marketing:
 Emotional marketing (focused on emotional experience)
 Sensual marketing (focused on sensual experience, positive
experience, emotional tie to the product
 Multisensory neuromarketing
 Five-sense marketing (how to address customer so they react
as required)

Guerrilla marketing
• Unconventional form of marketing
• Do not use traditional media or uses it in
an innovative way
• The goal is to reach maximum gain for
minimal costs
• Basic tactics – ‚hit‘ unexpectedly, focus
on selected targets, then withdraw
• Many types and forms – ambush
marketing, astroturfing, buzz marketing,
animalvertising, naturalvertising,
beamvertising, street art etc.
Zdroj: https://encrypted-
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HobxjrYT4_BmfdIEBKhUUAgdp5v_K2CbzGu0

Module 2.1 - Marketing mix 2

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