Marketing Mix and Logistics Management

MARKETING OFMARKETING OF
TRANSPORT AND LOGISTICSTRANSPORT AND LOGISTICS
SERVICES/PRODUCTS USINGSERVICES/PRODUCTS USING
THE 7Ps MODELTHE 7Ps MODEL
(MARKETING MIX)(MARKETING MIX)
Presented ByPresented By
EBO HAMMONDEBO HAMMOND (CMILT)(CMILT)
PROFESSIONAL DIPLOMAPROFESSIONAL DIPLOMA
CILT GIMPA PROGRAMMECILT GIMPA PROGRAMME

03/03/1003/03/10 EBO HAMMOND-CMILTEBO HAMMOND-CMILT
TOPIC OBJECTIVESTOPIC OBJECTIVES
• Explain the meaning of Marketing and marketingExplain the meaning of Marketing and marketing
exchangeexchange
• Acquire the key principles underpinning the 7PsAcquire the key principles underpinning the 7Ps
Model (Marketing Mix)Model (Marketing Mix)
• Understand the role and application of 7PsUnderstand the role and application of 7Ps
Model in transport and logistics services andModel in transport and logistics services and
productsproducts
• Identify how to gain competitive advantageIdentify how to gain competitive advantage
through effective management of the Psthrough effective management of the Ps

• LECTURELECTURE
PREVIEWPREVIEW
• What is Marketing ?What is Marketing ?
• A simple marketing exchangeA simple marketing exchange
processprocess
• Four Ps and Three extendedFour Ps and Three extended
PsPs
• Gaining competitiveGaining competitive

What is Marketing?What is Marketing?
• There are about 50 definitions ofThere are about 50 definitions of
marketing. Marketing could bemarketing. Marketing could be
categorized into three main definitionscategorized into three main definitions
as follows:as follows:
– Marketing as a process; concerned withMarketing as a process; concerned with
connecting supplier and customerconnecting supplier and customer
– Marketing as an orientation; mindsetMarketing as an orientation; mindset
– Marketing as a concept; ideaMarketing as a concept; idea

• The key definitions could be as follows:The key definitions could be as follows:
– ‘‘It is the action or business of bringing or sending toIt is the action or business of bringing or sending to
the market’-Oxford English Dictionarythe market’-Oxford English Dictionary
– ‘‘It is the human activity directed at satisfying needsIt is the human activity directed at satisfying needs
and wants through an exchange process’-Kotler,and wants through an exchange process’-Kotler,
19801980
– ‘‘It is a social and managerial process by whichIt is a social and managerial process by which
individuals and groups obtain what they want andindividuals and groups obtain what they want and
need through creating, offering, and exchangingneed through creating, offering, and exchanging
products of value with others’-Kotler 1991products of value with others’-Kotler 1991
– It is the management process responsible forIt is the management process responsible for
identifying, anticipating and satisfying customers’identifying, anticipating and satisfying customers’
requirements profitably’-CIM (UK)requirements profitably’-CIM (UK)
WHAT IS MARKETING? Cont..WHAT IS MARKETING? Cont..

THE EXCHANGE PROCESSTHE EXCHANGE PROCESS
08/03/1108/03/11 EBO HAMMOND-CMILTEBO HAMMOND-CMILT 66
Customer
Something of Value
Money, Goods, Services
Something of Value
Goods, Services, Benefits
Supplier

Products and Services Offered By LogisticsProducts and Services Offered By Logistics
and Transport Companiesand Transport Companies
• Physical ProductsPhysical Products
– Consumers goodsConsumers goods
– Industrial goodsIndustrial goods
• ServicesServices
– Freight haulageFreight haulage
– Freight ForwardingFreight Forwarding
– Passenger transportationPassenger transportation
– PackagingPackaging
– Courier servicesCourier services
– PurchasingPurchasing
– Waste disposalWaste disposal
– Storage/warehousingStorage/warehousing
– StevedoringStevedoring
– ITIT
– othersothers

• It refers to those marketing variables which are internal and canIt refers to those marketing variables which are internal and can
be influenced by the organization to enhance the exchangebe influenced by the organization to enhance the exchange
processprocess
• It is also known as Marketing MixIt is also known as Marketing Mix
• It was first developed by Neil Borden in 1953 (covering 4Ps)It was first developed by Neil Borden in 1953 (covering 4Ps)
• McCarthy coined the term 4Ps in 1960McCarthy coined the term 4Ps in 1960
• They have been developed as Acronyms; with 4Ps being theThey have been developed as Acronyms; with 4Ps being the
traditional Ps and 3 Extended Ps developed later.traditional Ps and 3 Extended Ps developed later.
• While the 4 traditional Ps were developed for tangible products,While the 4 traditional Ps were developed for tangible products,
the 3 extended Ps were developed for the non-tangible productsthe 3 extended Ps were developed for the non-tangible products
(services)(services)
• The full meanings of the 7Ps areThe full meanings of the 7Ps are Product, Price, Promotion,Product, Price, Promotion,
Place, Physical Evidence, People, and ProcessPlace, Physical Evidence, People, and Process
• The Key objective for strategic management of the 7Ps is toThe Key objective for strategic management of the 7Ps is to
achieve effective communications to customers of products andachieve effective communications to customers of products and
services offered by logistics and transport organisations to helpservices offered by logistics and transport organisations to help
attract patronageattract patronage
WHAT IS Marketing Mix?WHAT IS Marketing Mix?

• A product is made upA product is made up
of three attributesof three attributes
namely the:namely the:
– PhysicalPhysical
– FunctionalFunctional
– SymbolicSymbolic
PRODUCTPRODUCT
99
Product
Body
(Tangible)
Product Spirit
(Augmented)
Product Soul
(Core)

• A product is made up of three attributes namelyA product is made up of three attributes namely
the (1)the (1) PhysicalPhysical (2)(2) FunctionalFunctional and (3)and (3)
SymbolicSymbolic attributes.attributes.
• TheThe physical (Tangible product)physical (Tangible product) attributesattributes
refer to those aspects of the product that couldrefer to those aspects of the product that could
bebe felt, touched, seen, smelled or heardfelt, touched, seen, smelled or heard. It is the. It is the
products’ tangibility.products’ tangibility.
• TheThe functional (Core product)functional (Core product) attributesattributes
refer to therefer to the perceived need that the productperceived need that the product
satisfiessatisfies e.g. A soft drink has a functionale.g. A soft drink has a functional
attribute of satisfying thirst, or a car is purchasedattribute of satisfying thirst, or a car is purchased
to aid mobilityto aid mobility
PRODUCTPRODUCT
1010

• TheThe symbolicsymbolic
(Augmented product)(Augmented product)
attribute refers to theattribute refers to the image or valueimage or value
that the customer expects from thethat the customer expects from the
productproduct. People tend to buy particular. People tend to buy particular
products as opposed to othersproducts as opposed to others
because of the prestige they are likelybecause of the prestige they are likely
to obtain from it.to obtain from it.
– The physical aspects of the productThe physical aspects of the product
do carry marketing communications.do carry marketing communications.
The packaging of a product createsThe packaging of a product creates
certain perceptions that communicate.certain perceptions that communicate.
The material used, colour, size,The material used, colour, size,
shape, packaging attracts attentionshape, packaging attracts attention
and communicate a messageand communicate a message
sufficient enough to attract a customersufficient enough to attract a customer
•
PRODUCT Cont..PRODUCT Cont..
1111

• The price is the amount a customer pays for a product.The price is the amount a customer pays for a product.
• The price of a product of service indicates its ‘value’ toThe price of a product of service indicates its ‘value’ to
the customer. Low price may connote cheap productthe customer. Low price may connote cheap product
and high price, great value. An ‘expensive product’ mayand high price, great value. An ‘expensive product’ may
bestow great status, or be over – priced compared tobestow great status, or be over – priced compared to
functionally similar competition.functionally similar competition.
• Price is a major cue in the purchase decision processPrice is a major cue in the purchase decision process
• Low priced products normally receive more patronageLow priced products normally receive more patronage
and vise versaand vise versa
• Low price, high quality is the best formula to getLow price, high quality is the best formula to get
customerscustomers
PRICEPRICE

• Cost –Plus pricing;Cost –Plus pricing; This is a pricing methodThis is a pricing method
that set the price at production cost, includingthat set the price at production cost, including
both cost of goods and fixed costs at yourboth cost of goods and fixed costs at your
current volume, plus a certain profit margincurrent volume, plus a certain profit margin..
• Return on Investment pricing;Return on Investment pricing; Set yourSet your
price to achieve a target return-on-investmentprice to achieve a target return-on-investment
(ROI).(ROI).
• Value based pricing;Value based pricing; Price your productPrice your product
based on the value it creates for the customer.based on the value it creates for the customer.
This is usually the most profitable form of pricingThis is usually the most profitable form of pricing
PRICINGPRICING
METHODS/STRATEGIESMETHODS/STRATEGIES
1313

Popular price points/Psychological Pricing;Popular price points/Psychological Pricing; ThereThere
are certain "price points" (specific prices) at whichare certain "price points" (specific prices) at which
people become much more willing to buy a certainpeople become much more willing to buy a certain
type of product. They feel they are having a goodtype of product. They feel they are having a good
dealdeal
Fair/Ethical pricing;Fair/Ethical pricing; Sometimes it simply doesn'tSometimes it simply doesn't
matter what the value of the product is, even if youmatter what the value of the product is, even if you
don't have any direct competition.don't have any direct competition.
Positioning pricing;Positioning pricing; This is where pricing is done toThis is where pricing is done to
provide psychological pride or esteem or any otherprovide psychological pride or esteem or any other
relevant mental state that give satisfaction torelevant mental state that give satisfaction to
customers.customers.
PRICING METHODSPRICING METHODS
1414

Price/Quality MatrixPrice/Quality Matrix
08/03/1108/03/11 EBO HAMMOND-CMILTEBO HAMMOND-CMILT 1515
Economy
Pricing
Exploitative/
Skimming
(short Term)
Premium Pricing
Penetration Pricing
(short term)
Low High
LowHigh
Price
Quality

• Place represents the location where a product can bePlace represents the location where a product can be
purchased. It can include any physical store as well aspurchased. It can include any physical store as well as
virtual stores on the Internet.virtual stores on the Internet.
• It also refers to distribution and making productsIt also refers to distribution and making products
available to customersavailable to customers
• The place a product or service is distributed plays a veryThe place a product or service is distributed plays a very
important function in gaining competitive advantageimportant function in gaining competitive advantage
• There is no point in researching the consumer,There is no point in researching the consumer,
designing a package to meet the identified needs,designing a package to meet the identified needs,
establishing a price that is fair and acceptable andestablishing a price that is fair and acceptable and
creating a brilliant promotion campaign if the packagecreating a brilliant promotion campaign if the package
cannot be accessed by the consumer.cannot be accessed by the consumer.
PLACEPLACE

• The producer must plan for the availability of theThe producer must plan for the availability of the
product and the distribution channels to be usedproduct and the distribution channels to be used
• The product must be readily available whereThe product must be readily available where
consumers would expect to find itconsumers would expect to find it
• The product distribution model could be theThe product distribution model could be the
followingfollowing
– Manufacturer to CustomerManufacturer to Customer
– Manufacturer to Retailer to CustomerManufacturer to Retailer to Customer
– Manufacturer to Wholesaler to Retailer to CustomerManufacturer to Wholesaler to Retailer to Customer
PLACE Cont…PLACE Cont…

PLACE Cont… (DISTRIBUTIONPLACE Cont… (DISTRIBUTION
CHAIN)CHAIN)
Manufacturer/Service Provider
Customer
Wholesaler
Retailer

• Type of product (specialised vs general)Type of product (specialised vs general)
• Length of supply chainLength of supply chain
• Purchase volumesPurchase volumes
• Protection of intellectual property rightsProtection of intellectual property rights
• Level of control over outbound supply chainLevel of control over outbound supply chain
• Financial implicationsFinancial implications
• Speed of market penetration to customerSpeed of market penetration to customer
• Technological considerations (internet)Technological considerations (internet)
• Can you think of any other considerations?Can you think of any other considerations?
FACTORS CONSIDERED IN ADOPTING AFACTORS CONSIDERED IN ADOPTING A
PARTICULAR DISTRIBUTION MODELPARTICULAR DISTRIBUTION MODEL

• The tools that the marketerThe tools that the marketer
uses to communicate ideas anduses to communicate ideas and
to stimulate a particularto stimulate a particular
perception of products andperception of products and
services by individuals orservices by individuals or
people who have beenpeople who have been
aggregated into a target marketaggregated into a target market
are referred to as theare referred to as the
Promotional Mix (MarketingPromotional Mix (Marketing
communication mix)communication mix)
• The key elements comprisingThe key elements comprising
the Promotional Mix arethe Promotional Mix are
advertising, public relations,advertising, public relations,
sales promotion, personalsales promotion, personal
selling, direct marketing. Theseselling, direct marketing. These
elements each have a variety ofelements each have a variety of
sub-classifications.sub-classifications.
PROMOTIONPROMOTION

• People or personnel are very importantPeople or personnel are very important
in marketing communication becausein marketing communication because
they are the first point of contact withthey are the first point of contact with
the customer or prospective customer.the customer or prospective customer.
• If they are not intellectually capableIf they are not intellectually capable
they cannot be trained in specializedthey cannot be trained in specialized
products. If their dress, manner andproducts. If their dress, manner and
bearing are not correct, the image willbearing are not correct, the image will
suffer.suffer.
• Above all they have to be concerned toAbove all they have to be concerned to
help the customer make the besthelp the customer make the best
choice and to go away pleased with thechoice and to go away pleased with the
service received.service received.
• Key factors considered are dress code,Key factors considered are dress code,
mannerism, appearance andmannerism, appearance and
countenance, educational level, sensecountenance, educational level, sense
of duty, multilingual skills and othersof duty, multilingual skills and others
• People add a human touch to thePeople add a human touch to the
exchange processexchange process
PERSONNEL/PEOPLE/PERSONPERSONNEL/PEOPLE/PERSON
SS

PHYSICAL EVIDENCEPHYSICAL EVIDENCE
• This refers to the point-of-saleThis refers to the point-of-sale
environmentenvironment
• The physical aspects of theThe physical aspects of the
point-of-sale, the store image,point-of-sale, the store image,
etc have implications foretc have implications for
communicating a message tocommunicating a message to
customerscustomers
• A customer’s perception ofA customer’s perception of
the point-of-sale can bethe point-of-sale can be
crucial to the success of thecrucial to the success of the
whole package. For example,whole package. For example,
if the ambience is wrong, theif the ambience is wrong, the
target customer may nevertarget customer may never
enter the chosen store(s).enter the chosen store(s).
• Issues considered areIssues considered are
cleanliness, temperature,cleanliness, temperature,
comfort, colour, interiorcomfort, colour, interior
design/décor, location, etcdesign/décor, location, etc

PROCESSPROCESS
• This refers to the format forThis refers to the format for
dealing with or processingdealing with or processing
customerscustomers
• An efficient processingAn efficient processing
system providessystem provides
convenience for customersconvenience for customers
• Key issues considered areKey issues considered are
waiting time, privacy,waiting time, privacy,
secrecy, safety, security,secrecy, safety, security,
speed, integrity and others.speed, integrity and others.
• Logistics and TransportLogistics and Transport
Organizations that provideOrganizations that provide
a hassle free processinga hassle free processing
method for customers standmethod for customers stand
to attract and retainto attract and retain
customerscustomers

4Ps vs. 4As4Ps vs. 4As
Supplier Decisions
(4Ps)
Product
Price
Place
Promotion
Customer
Reactions (4As)
Awareness
Availability
Affordability
AcceptabilityPeople
Physical Evidence
Process
Service
Support (3Ps)

MARKETING
MIX
STRATEGIES FOR ACHIEVING COMPETITIVE
ADVANTAGE
Product Appealing designs, new product introduction, attractive colour,
quality packaging, superior performance, effective positioning
Price Competitive pricing, Premium pricing
Place Appointing and managing distributors effectively, effective
push/pull mix in the supply pipeline, effective transportation
system
Promotion Effective Promotion Mix
Physical
Evidence
Mindful of cleanliness, ambient temperature, lighting, aesthetics,
architecture, etc
People Use of celebrities, revered or people popular for a particular
course to endorse products/services
Process Less waiting time, hassle free product access, adequate security
at point of sale, protection of customer privacy

CONCLUSIONCONCLUSION
• Broadly defined, optimizing the marketing mixBroadly defined, optimizing the marketing mix
is the primary responsibility of marketing.is the primary responsibility of marketing.
• By offering the product with the rightBy offering the product with the right
combination of the Seven Ps, marketers cancombination of the Seven Ps, marketers can
improve their results and marketingimprove their results and marketing
effectiveness.effectiveness.

• LECTURE REVIEWLECTURE REVIEW
• What is Marketing ?What is Marketing ?
• A simple marketing exchangeA simple marketing exchange
processprocess
• Four Ps and Three extendedFour Ps and Three extended
Ps (7Ps)Ps (7Ps)
• 4Ps vs. 4As4Ps vs. 4As
• Gaining competitiveGaining competitive
advantageadvantage

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