MK!""# MK !""# $rinciples $rinc iples o Mark Mar keting Topic 1 – Introduction to Marketing he process by %hich companies create value or customers and build strong customer relationships in order to capture value rom customers in return
Marketing
Understan d the marketpla ce and customer needs
Design a customerdriven marketing strategy
Construct an integrated marketing program that delivers superior value
Build proftable relationshi ps and create customer delight
Capture value rom customers to create profts and customers equity
& 'imple Model o the Marketing $rocess
Needs
Wants
Demands Utility
Market Ofering
Marketing myopia
Excange
'tates o elt deprivation (Maslo%)s hierarchy o needs* + can uncover latent needs he orm human needs take take as they are shaped by culture and individual personality ,uman %ants that are backed by buying po%er ! .orm / ime # $lace 0 $osses ssess sion ion 'ome combination o products1 services1 inormation1 or e2periences o3ered to a market to satisy a need or %ant he mistake o paying paying more attention to the specifc products a company o3ers than to the benefts and e2periences derived rom these products + ocus on %ants instead o needs he act o obtaining a desired desired ob4ect rom someone by o3ering something in return that requires 5 conditions6 ! &t least least t%o t%o par parti ties es
Market Marketing Management
!alue "roposition
Te "roduction #oncept
Te "roduct #oncept
Te $elling #oncept
Te Marketing #oncept
/ Mutua utuall valu value e # Comm Commun unic icat atio ion n 0 Deliv eliver ery y 5 .reed reedom om o cho choic ice e he set o all actual and potential buyers o a product or service he art and science o choosing target markets and building proftable relationships %ith them he set o benefts or values values a company promises to deliver to customers to satisy their needs he idea that consumers %ill avour products that are available and highly a3ordable and that the organi7ation should thereore ocus on improving production and distribution e8ciency Company may ocus too narro%ly on their o%n operations and lose sight o the real ob4ective + satisying customer needs and building customer relationships he idea that consumers %ill avour products that o3er the most quality1 perormance and eatures and that the organi7ation should thereore devote its energy to making continuous product improvements May lead to marketing myopia he idea that consumers %ill not buy enough o the frm)s products unless it undertakes a large-scale selling and promotion e3ort ypically ypically practiced %ith unsought goods 9t ocuses on creating sales transactions rather than on building long-term1 proftable customer relationships: the aim is to sell %hat the company makes rather than making %hat the market %ants he marketing management philosophy that achieving organi7ational goals depends on kno%ing the needs and %ants o target
Market Marketing Management
!alue "roposition
Te "roduction #oncept
Te "roduct #oncept
Te $elling #oncept
Te Marketing #oncept
/ Mutua utuall valu value e # Comm Commun unic icat atio ion n 0 Deliv eliver ery y 5 .reed reedom om o cho choic ice e he set o all actual and potential buyers o a product or service he art and science o choosing target markets and building proftable relationships %ith them he set o benefts or values values a company promises to deliver to customers to satisy their needs he idea that consumers %ill avour products that are available and highly a3ordable and that the organi7ation should thereore ocus on improving production and distribution e8ciency Company may ocus too narro%ly on their o%n operations and lose sight o the real ob4ective + satisying customer needs and building customer relationships he idea that consumers %ill avour products that o3er the most quality1 perormance and eatures and that the organi7ation should thereore devote its energy to making continuous product improvements May lead to marketing myopia he idea that consumers %ill not buy enough o the frm)s products unless it undertakes a large-scale selling and promotion e3ort ypically ypically practiced %ith unsought goods 9t ocuses on creating sales transactions rather than on building long-term1 proftable customer relationships: the aim is to sell %hat the company makes rather than making %hat the market %ants he marketing management philosophy that achieving organi7ational goals depends on kno%ing the needs and %ants o target
markets and delivering the desired satisactions better than competitors do
Te $ocietal Marketing #oncept
#ustomer %elationsip Management &#%M'
#ustomer "ercei(ed !alue
#ustomer $atis)action
#ustomer*+enerated Marketing
"artnersip %elationsip Management
#ustomer ,i)etime !alue
$are o) #ustomer
#ustomer E-uity
,igh $roftability
Customer-driven marketing vs customer driving marketing & principle o enlightened marketing that holds that a company should make good marketing decisions by considering consumers) %ants1 the company)s requirements1 consumers) long-run interests and society)s longrun interests 'ustainable marketing he overall process o building building and maintaining proftable customer relationships by delivering superior customer value and satisaction he customer)s evaluation o the the di3erence bet%een all the benefts and all the costs o a marketing m arketing o3ering relative to those o competing o3ers he e2tent to %hich a product)s perceived perormance matches a buyer)s e2pectations Brand e2changes created by consumers themselves + both invited and uninvited + by %hich consumers are playing an increasing role in shaping their o%n brand e2periences ;orking closely %ith partners in other company departments and outside the company to 4ointly bring greater value to customers he value o the entire stream stream o purchases that a customer %ould make over a lietime o patronage he portion o the customer)s purchasing th ata company gets in its product categories he total combined customer lietime values o all the company)s customers
$ort* $ort*T Term #usto #ustomer mers s .utter/ies
,ong* ,ong*T Term #ustom #ustomers ers True 0riends
=o% $roftability
company)s o3erings and company)s o3erings and customer)s needs: high customer)s needs: proft potential highest proft potential $trangers .arnacles =ittle ft bet%een =imited ft bet%een company)s o3erings and company)s o3erings and customer)s needs: lo%est customer)s needs: lo% proft potential proft potential Customer >elationship
$trategic "lanning
Mission $tatement
!alue #ain
!alue Deli(ery Netork
Marketing $trategy
Marketing Mix
Market $egmentation
he process o developing and maintaining a strategic ft bet%een the organi7ation)s goals and capabilities and its changing marketing opportunities & statement o the organi7ation)s purpose + %hat it %ants to accomplish in the larger environment ! Be market oriented / .it the market environment # Be based on distinctive competencies 0 Be motivating he series o departments that carry out value-creating activities to design1 produce1 market1 deliver and support a frm)s products he net%ork made up o the company1 suppliers1 distributors and ultimately customers %ho ?partner) %ith each other to improve the perormance o the entire system he marketing logic by %hich the business unit hopes to achieve its marketing ob4ectives ! Market 'egmentation / arget Marketing # Market $ositioning and Di3erentiation he set o controllable1 tactical marketing tools that the frm blends to product the response it %ants in the target market ! $roduct / $rice # $lace 0 $romotion Dividing a market into smaller groups
Market $egment
Market Targeting
"ositioning
Marketing #ontrol
Operating #ontrol
$trategic #ontrol
Marketing 2udit
%eturn on Marketing In(estment
%ith distinct needs1 characteristics1 or behaviours that might require separate products or marketing mi2es & group o consumers %ho respond in a similar %ay to a given set o marketing e3orts he process o evaluating each market segment)s attractiveness and selecting one or more segments to enter &rranging or a product to occupy a clear1 distinctive and desirable place relative to competing products in the minds o target consumers he process o measuring and evaluating the results o marketing strategies and plans and taking corrective action to ensure that ob4ectives are achieved Checking ongoing perormance against the annual plan and taking corrective action %hen necessary =ooking at %hether the company)s basic strategies are %ell matched to its opportunities & comprehensive1 systematic1 independent1 and periodic e2amination o a company)s environment1 ob4ectives1 strategies1 and activities to determine problem areas and opportunities and to recommend a plan o action to improve the company)s marketing perormance he net return rom a marketing investment divided by the costs o the marketing investment
Topic 3 – Macroen(ironment and Microen(ironment Marketing En(ironment
Microen(ironment
Macroen(ironment
he actors and orces outside marketing that a3ect marketing management)s ability to build and maintain successul relationships %ith target customers he actors close to the company that a3ect its ability to serve its customers ! Company / 'uppliers # Marketing 9ntermediaries 0 Customer Markets 5 Competitors @ $ublics he larger societal orces that a3ect the microenvironment ! Demographic / Aconomic # atural 0 echnological 5 $olitical @ Cultural .orces
4ig %elati(e Market $are $tar ,igh gro%th1 high-share businesses that oten need heavy investment to fnance their rapid gro%th Aventually1 gro%th %ill slo% and they %ill turn into cash co%s
,o %elati(e Market $are ,igh Market
ate 5uestion Mark =o%-share business units in high-gro%th markets that require a lot o cash to hold their share1 let alone increase it Management needs to evaluate %hich to be built into stars and %hich to be phased out =o% Market ate #as #o Dog =o%-gro%th1 high-share =o%-gro%th1 lo%-share business units that businesses that may require less investment generate enough cash to to hold their market maintain themselves but share and provide a lot o do not promise to be cash large sources o cash Boston Consulting
A2isting Markets
Existing "roducts Market "enetration
Ne "roducts "roduct De(elopment
e% Markets
Making more sales to current customers %ithout changing its products Market De(elopment 9dentiying and developing ne% markets or its current products
3ering modifed or ne% products to current market segments
Di(ersi6cation 'tarting up or buying businesses outside o its current products and markets $roductMarket A2pansion
Topic 7 – Market Intelligence .resh understandings o customers and the marketplace derived rom marketing inormation that become the basis or creating customer value and relationships $eople1 equipment and procedures to Marketing In)ormation $ystem gather1 sort1 analy7e1 evaluate1 and &MI$' distribute needed1 timely and accurate inormation to marketing decision makers ! &ssess 9normation eeds / Develops eeded 9normation # &naly7e 9normation 0 Distributes 9normation #ompetiti(e Marketing Intelligence he systematic collection and analysis o publicly available inormation about competitors and developments in the marketplace he systematic design1 collection 1 Marketing %esearc analysis1 and reporting o data relevant to a specifc marketing situation acing and organi7ation ! 9nternal Data $ources o) Marketing In)ormation / Marketing 9ntelligence # Marketing >esearch
#ustomer Insigts
Defning the problem and research ob4ectives
Developing the research plan or collecting inormation
9mplementi ng the research plan collecting and analy7ing the data
9nterpretin g and reporting the fndings
he Marketing >esearch $rocess
Exploratory %esearc
Descripti(e %esearc
Marketing research to gather preliminary inormation that %ill help defne problems and suggest hypothesis Marketing research to better describe marketing problems1 situations1 or markets1 such as the market potential
#ausal %esearc De(eloping te %esearc "lan
$econdary Data
or a product or the demographics and attitudes o consumers Marketing research to test hypothesis about cause-and-e3ect relationships ! Determine the e2act inormation needed / Develop a plan or gathering it e8ciently # $resent the plan to management &dvantages6 Can be obtained more quickly and at a lo%er cost Can sometimes provide data that is not directly available or too e2pensive to collect Disadvantages eeded inormation may not e2ist Data might not be very usable ! >esearch &pproaches / Contact Methods # 'ampling $lan 0 >esearch 9nstruments he gathering o primary data by observing relevant people1 actions1 and situations & orm o observational research that involves sending trained observers to %atch and interact %ith consumers in their ?natural habitat)
"rimary Data #ollection
O8ser(ational %esearc
Etnograpic %esearc
$ur(ey %esearc
Experimental %esearc
"ro8a8ility $ample
Non*"ro8a8ility $ample
But1 could be a3ected by cultural di3erences andom 'ample / 'tratifed >andom 'ample # Cluster (area* 'ample ! Convenience 'ample / Eudgement 'ample # Fuota 'ample
#ustomer %elationsip Management &#%M'
Managing detailed inormation about individual customers and careully managing customer touch points to ma2imi7e customer loyalty
Topic 9 – #onsumer .ea(iour he buying behaviour o fnal consumers + individuals and households %ho buy goods and services or personal consumption
#onsumer .uying .ea(iour
Culture 'ubculture 'ocial Class C u l t u r a l
>eerence oles and 'tatus
' o c i a l
&ge and =iecycle stage ccupation Aconomic $ 'ituation e r s =iestyle o n a $ersonality l and 'elConcept
Motivation $ s $erception y c =earning h o l Belies and o &ttitudes g i
Characteristics &3ecting Consumer Behaviour
G&=' =iestyle Classifcation
c a l
9nIuence rom others to conorm to their e2pectations Use others as a source o inormation he specifc mi2 o human traits that may be attributed to a particular brand ! 'incerity / A2citement # Competence 0 'ophistication 5 >uggedness & need that is su8ciently pressing to direct the person to seek satisaction o the need
Normati(e $ocial In/uence In)ormational $ocial In/uence .rand "ersonality
Moti(e
'el &ct ual i7a tio Asteem n eeds
H 'el-Development and >eali7ation
H 'el-Asteem1 >ecognition1 'tatus H 'ense o Belonging1 =ove
'ocial eeds
H 'ecurity1 $rotection
'aety eeds $hysiological eeds
H ,unger1 hirst
Maslo%)s ,ierarchy o eeds
$electi(e 2ttention
$electi(e Distortion
$electi(e %etention
,earning
he tendency or people to screen out most o the inormation to %hich they are e2posed he tendency o people to interpret inormation in a %ay that %ill support %hat they already believe he tendency o people to orget much o %hat they learn and retain inormation that supports their attitudes and belies Changes in an individual)s behaviour arising rom e2perience Marketers can build up demand or a
product by associating it %ith strong drives1 using motivating cues1 and providing positive reinorcement
'ignifcant Di3erences Bet%een Brands
4ig In(ol(ement #omplex .uying .ea(iour Usually %hen product is e2pensive1 risky1 purchased inrequently and highly sele2pressive Marketers need to kno% that inormation gathering and evaluating 9s important1 and need to di3erentiate their brand)s eatures
.e% Di3erences Bet%een Brands
Dissonance*%educing .uying .ea(iour $roduct may be e2pensive1 purchased inrequently and highly sel-e2pressive1 but %ith e% di3erences in brands Buyers may respond primarily to a good price or to purchase convenience Marketer)s ater-sale communications should provide evidence and support to help customers eel good about their brand choices and avoid post-purchase
,o In(ol(ement !ariety*$eeking .uying .ea(iour ten has a lot o brand s%itching Market leader %ill try and encourage habitual buying behaviour by dominating shel space1 running requent reminder advertising Challenger frms %ill encourage variety seeking by o3ering lo%er prices1 special deals1 coupons1 ree samples1 and advertising that presents reasons or trying something ne% 4a8itual .uying .ea(iour Consumer behaviour does not pass though the usual belie-attitudebehaviour sequence &d repetition creates brand amiliarity rather than brand conviction Marketers oten used price and sales promotion to stimulate product trial
dissonance Buying Decision Behaviour
Beed recognitio n
9nformati on search
Avaluatio n of alternativ es
$urchase decision
$ostpurchase behaviour
Buyer Decision $rocess
! $ersonal 'ources + =egitimi7e1 evaluate - eg bu77vialstealth marketing / Commercial 'ources - 9norm # $ublic 'ources - 9norm 0 A2periential sources + Avaluate Buyer discomort caused by postpurchase conIict
In)ormation $earc
#ogniti(e Dissonance
&%arene ss
Avaluatio 9nterest n
rial
&doption
'tages in the &doption $rocess
0is8ein Model &Teory o) %easoned 2ction'
#ategories o) 2dopters
%ate o) 2doption &Ne "roducts'
&ttbrand J biei &ttbrand J &ttitude to%ards brand bi J Belie o brand)s perormance on attribute i ei J Avaluation o attribute i)s importance ! 9nnovators + venturesome / Aarly &dopters + opinion leaders # Aarly Ma4ority + deliberate 0 =ate Ma4ority + skeptical 5 =aggards + tradition bound ! >elative &dvantage / Compatibility # Comple2ity 0 Divisibility
5 @ L
Communicability 9nitial and ongoing costs >isk and uncertainty 'ocial approval
Topic : * $egmentation ; Targeting +eograpic $egmentation
Demograpic $egmentation
"sycograpic $egmentation
.ea(ioural $egmentation
Occasion $egmentation
.ene6t $egmentation
Intermarket $egmentation
%e-uirements )or Efecti(e $egmentation
E(aluating Market $egments
Undiferentiated &Mass' Marketing
Diferentiated &$egmented' Marketing
Dividing a market into di3erent geographical units such as nations1 states1 regions1 counties1 cities or neighbourhoods Dividing a market into groups based on variables such as age1 gender1 amily si7e1 amily lie cycle1 income1 occupation1 education1 religion1 race1 generation and nationality Dividing a market into di3erent groups based on social class1 liestyle1 or personality characteristics Dividing a market into groups based on consumer kno%ledge1 attitude1 use o1 or response to a product Dividing a market into groups according to occasions %hen buyers get the idea to buy1 actually make their purchase1 or use the purchased item Dividing a market into groups according to the di3erent benefts that consumers seek rom the product .orming segments o consumers %ho have similar needs and buying behaviour even though they are located in di3erent countries ! Measurable / &ccessible # 'ubstantial 0 Di3erentiable 5 &ctionable ! 'egment 'i7e and elative $o%er o Buyers1 $o%er o 'uppliers # Company b4ectives and >esources & market-coverage strategy in %hich a frm decides to ignore market segment di3erences and go ater the %hole market %ith on o3er & market-coverage strategy in %hich a frm decides to target several market segments and designs separate o3ers
#oncentrated &Nice' Marketing
Micromarketing
,ocal Marketing
Indi(idual Marketing
#oosing a Targeting $trategy
or each & market-coverage strategy in %hich a frm goes ater a large share o one or a e% segments o niches he practice o tailoring products and marketing programs to the needs and %ants o specifc individuals and local customer groups 9t includes local and individual marketing ailoring brands and promotions to the needs and %ants o local customer groups + cities1 neighbourhoods1 and even specifc stores ailoring products and marketing programs to the needs and preerences o individual customers ! Company >esources / $roduct Gariability # $roduct)s =ie-Cycle 'tage 0 Market Gariability 5 Competitors) Marketing 'trategies
Topic < – "ositioning ; $er(ice Marketing "roduct "osition
#ompetiti(e 2d(antage
Uni-ue $elling "ropositions
"ositioning $tatement
"ositioning "it)alls
"oints o) Diference
he %ay the product is defned by consumers on important attributes + the place the product occupies in consumers) minds relative to competing products &n advantage over competitors gained by o3ering consumers greater value1 either through lo%er prices or by providing more benefts that 4ustiy higher prices $roduct1 services1 channels1 people or image ! 9mportant / Distinctive # 'uperior 0 Communicable 5 $re-emptive @ &3ordable L $roftable & statement that summari7es company or brand positioning + it takes the orm6 o (target segment and need* our (brand* is (concept* that (point o di3erence* ! Under $ositioning / ver $ositioning # Conused $ositioning 0 Doubtul $ositioning Unique associations %ith a brand Clear superiority &ssociations shared %ith other brands ecessary but not su8cient or brand choice egate competitor)s $D ?n par) %ith competitors especially %hen consumers are sophisticated and competition intense ! 9ntangible / 9nseparable # Gariable 0 $erishable ! >eliability / angibles •
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"oints o) "arity
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$er(ice
Managerial Implications
$er(ice*"ro6t #ain
# >esponsiveness 0 &ssurance 5 Ampathy he chain that links service frm profts %ith employee and customer satisaction
C o m p a n y me A s plo e yC ustom rs e
9nternal
A2ternal
9nteractive
Internal Marketing
Interacti(e Marketing
rienting and motivating customercontact employees and the supporting service people to %ork as a team to provide customer satisaction raining service employees is the fne art o interacting %ith customers to satisy their needs
Topic = – "roduct ; .randing ,e(els o) "roducts
#onsumer "roduct #on(enience "roduct
$opping "roduct
$pecialty "roduct
Unsougt "roduct
Industrial "roduct
"roduct ,ine
,ine $tretcing Donard $tretcing &.y 4iger End 0irms'
! Core Customer Galue / &ctual $roduct # &ugmented $roduct Bought by the fnal consumers or personal consumption Consumer product that the customer usually buys requently1 immediately1 and %ith minimum comparison and buying e3ort Consumer product that the customer1 in the process o selection and purchase1 characteristically compares on bases such as suitability1 quality1 price1 and style Consumer product %ith unique characteristics or brand identifcation or %hich a signifcant group o buyers is %illing to make a special purchase e3ort Consumer product that the consumer may kno% about but does not normally think o buying $roduct bought by individuals and organi7ations or urther processing or or use in conducting a business & group o products that are closely related because they unction in a similar manner1 are sold to the same customer groups1 are marketed through the same types o outlets1 or all %ithin given price ranges & company lengthens its product line beyond its current range btain aster gro%th at lo%er end A2ploit established quality image $re-empt potential entrants >espond to attack at high end >isks Competitive retaliation at high end Dealer resistance Cannibali7ation 9mage dilution btain higher margins at higher •
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Upard $tretcing &.y ,oer End
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0irms' • •
end .ull-line ob4ective &dd prestige
>isks • • •
To*Way $tretcing &.y Mid Market 0irms'
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Competitive retaliation Consumer scepticism $oorly trained dealers and sales orce ,old o competitors at lo% end &ttract aNuent consumers at high end
>isks Customers trading do%n 9mage conusion >esource drain & name1 term1 sign1 symbol1 or design1 or a combination o these that identifes the products or services o one seller o group o sellers and di3erentiates them rom those o competitors ! $ackaging Concept / $ackaging Alements # $roduct 'aety 0 Anvironmental Concerns he positive di3erential e3ect that kno%ing the brand name has on customer response to the product or service ! Brand $ositioning / Brand ame 'elections # Brand 'ponsorship 0 Brand Development $roduct &ttributes $roduct Benefts Belies and Galues + Amotions 'uggest benefts and qualities Aasy to pronounce1 recogni7e and remember Distinctive A2tendable ranslate easily into oreign languages Capable o registration and legal protection &dvantages o association in case o ailure Can market several brands in • • •
.rand
"ackaging
.rand E-uity
.rand $trategy Decisions
.rand "ositioning
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.rand Name $election
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Indi(idual .randing
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competition %ith each other Create advancement %ithin frm More control over distribution Disadvantages ,igh cost o promoting individual brand o capitali7ation on established reputation &dvantages Aasier and less costly to introduce Capitali7e on reputation Disadvantages .ailure may cause association
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0amily .randing
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A2isting Brand ame
e% Brand ame
Managing Ne*"roduct De(elopment
Existing "roducts ,ine Extensions A2tending an e2isting brand name to ne% orms1 colours1 si7es1 ingredients1 or Iavours o an e2isting product category Multi8rands 9ntroducing additional brands in an e2isting product category Brand Development • • •
Wy Ne "roducts 0ail>
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Ne "roducts .rand Extensions A2tending an e2isting brand name to ne% product categories
Ne .rands 9ntroducing a ne% brand in a ne% product category
Customer-Centered eam-Based 'ystematic $oor understanding o customer needs $oor e2ecution o marketing strategy
Topic ? – "ricing #onsiderations and $trategies
Marketing O8@ecti(es
! 'urvival =o% prices hoping to o increase demand / Current $roft Ma2imi7ation o Choose the price that produces the ma2imum
Marketing Mix $trategy
OrganiAational #onsiderations Te Market ; Demand #ustomer "ricing O8@ecti(es
#ompetition*.ased "ricing
#ost*.ased "ricing
#ost*"lus &Mark*up' "ricing .reak*E(en &Target "ro6t' "ricing
!alue*.ased "ricing
proft # Market 'hare =eadership =o%est possible prices to o become the market share leader 0 $roduct Fuality =eadership ,igh prices to cover o higher perormance quality and >OD $rice decisions must be coordinated %ith product design1 distribution1 and promotion decisions to orm a consistent and e3ective marketing program Must decide %ho %ithin the organi7ation should set prices 'ets the upper limit in the 0 market structures $rice elasticity o demand ! &ttract ne% customers / $roftably retain e2isting customers # $revent competition rom entering market 0 'tabili7e the market 5 Keep loyalty and support o resellers @ &void government intervention L ,elp sales o other products 'etting prices based on competitors) strategies1 costs1 prices and market o3erings ! ate $ricing / 'ealed-Bid $ricing 'etting prices based on the costs or producing1 distributing1 and selling the product plus a air rate o return or e3ort and risk &dding a standard mark-up to the cost o the product 'etting prices to break even on the costs o making and marketing a product1 or setting prices to make a target proft Based on standard volume that requires good demand estimates $ J GC P .CQ P rKQ 'etting prices based on buyers)
perceptions o value rather than on the seller)s costs
Market $kimming "ricing
Market "enetration "ricing
"roduct ,ine "ricing
Optional*"roduct "ricing #apti(e*"roduct "ricing
.y*"roduct "ricing
"roduct .undle "ricing Discount and 2lloance "ricing
$egmented "ricing
"sycological "ricing
%e)erence "rices
"romotional "ricing
Company cannot design the product then set the price 'etting a high price or a ne% product to skim ma2imum revenues layer by layer rom the segments %illing to pay the high price: the company makes e%er but more proftable sales 'etting a lo% price or a ne% product to attract a large number o buyers and a large market share 'etting the price steps bet%een various products in a product line based on cost di3erences bet%een the products1 customer evaluation o di3erent eatures1 and competitors) prices he pricing o optional or accessory products along %ith a main product 'etting a price or products that must be used along %ith a main product1 such as blades or ra7ors and cartridges or printers 'etting a price or by-products to make the main product)s price more competitive Combining several products and o3ering the bundle at a reduced price >eduction in price during a stated period o time $romotional money paid by manuacturers to retailers in return or an agreement to eature the manuacturer)s products in some %ay 'elling a product or service at t%o or more prices1 %here the di3erence in prices is not based on di3erences in cost & pricing approach that considers the psychology o prices and not simply the economics: the price is used to say something about the product $rices that buyers carry in their minds and reer to %hen they look at a given product emporarily pricing products belo% the list price1 and sometimes even belo% cost1 to increase short-run sales
Creates ?deal-prone) customers Arode brand equity =ead to industry price %ars 'etting prices or customers located in di3erent parts o the country or %orld &d4usting prices continually to meet the characteristics and needs o individual customers and situations he drop in the average per unit production cost that comes %ith accumulated production e2perience ! ,old current price / >educe price # >aise perceived value 0 9mprove quality and increase price 5 =aunch lo%-price ?fghting-brand) + i segment is price sensitive • • •
+eograpical "ricing Dynamic "ricing
Experience #ur(e
%esponses to a "rice #ange
Topic B * "lacement !alue Deli(ery Netork
Marketing #annel
#annel 0unctions
he net%ork made up o the company1 suppliers1 distributors and ultimately customers %ho ?partner) %ith each other to improve the perormance o the entire system & set o interdependent organi7ations that help make a product or service available or use or consumption by the consumer or business user ransactional Contact >isk-aking egotiation $romotion =ogistical Matching $hysical Distribution .acilitating 9normation .inancing Disagreement among marketing channel members on goals and roles + %ho should do %hat or %hat re%ards & channel consisting o one or more independent produces1 %holesalers1 and retailers1 each a separate business seeking to ma2imi7e his o%n profts & distribution channel structure in %hich producers1 %holesalers1 and retailers act as a unifed system ne channel member o%ns the others1 has contracts %ith them1 or has so much po%er that they all cooperate & vertical marketing system that combines successive stages o production and distribution under single o%nership + channel leadership is established through common o%nership & vertical marketing system in %hich independent frms at di3erent levels o production and distribution 4oin together through contracts to obtain more economies o sales impact than • • • •
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#annel #on/ict
#on(entional Distri8ution #annel
!ertical Marketing $ystem &!M$'
#orporate !M$
#ontractual !M$
2dministered !M$
4oriAontal Marketing $ystem
Multicannel &4y8rid' Marketing #annels
Disintermediation
#annel Design Decisions
2nalyAing #onsumer Needs
they could achieve alone + eg ranchise organi7ation & vertical marketing system that coordinates successive stages o production and distribution1 not through common o%nership or contractual ties1 but through the si7e and po%er o one o the parties & channel arrangement in %hich t%o or more companies at one level 4oin together to ollo% a ne% marketing opportunity & distribution system in %hich a single frm sets up t%o or more marketing channels to reach one or more customer segments he cutting out o marketing channel intermediaries by product or service producers1 or the displacement o traditional resellers by radical ne% types o intermediaries ! &naly7ing Consumer eeds / 'etting Channel b4ectives # 9dentiying Ma4or <ernatives 0 Avaluate the Ma4or <ernatives ;hat consumer %ants &vailability o resources or skills to satisy those needs Balance needs1 easibility1 costs and consumer price preerences ;hich segments to serve and best channels to use Avaluate company1 products1 marketing intermediaries1 competitors1 environment ype o intermediaries umber o intermediaries >esponsibilities o channel members Aconomic criteria Control issues &daptive criteria 'tocking the product in as many outlets as possible + convenience products
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$etting #annel O8@ecti(es
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Identi)ying Ma@or 2lternati(es
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E(aluating Ma@or 2lternati(es
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Intensi(e Distri8ution
Exclusi(e Distri8ution
$electi(e Distri8ution
%etailing
2mount o) $er(ice
"roduct ,ine
%elati(e "rices
+ shopping and some specialty goods + gain stronger distributor selling support and more control over prices1 promotion1 credit and services: enhances image and allo%s or higher mark-ups he use o more than one1 but e%er than all1 o the intermediaries %ho are %illing to carry the company)s products + specialty products and industrial equipment + develop good %orking relationships and e2pect a better-thanaverage selling e3ort: good market coverage %ith more control and less cost than intensive distribution &ll activities involved in selling goods or services directly to fnal consumers or their personal1 non-business use ! 'el-'ervice / =imited 'ervice # .ull 'ervice ! 'pecialty 'tores + narro% product line %ith deep assortments / Department 'tores + %ide variety o product lines # 'upermarkets + %ide variety o grocery and household products 0 Convenience 'tores + limited line o high-turnover convenience goods 5 'uperstores + large assortment o routinely purchased ood products1 non-ood items and services @ Category Killer + giant specialty store that carries a very deep assortment o a particular line ! Discount 'tore + accepts lo%er margins %hile selling higher volume / 3-$rice >etailers + buys at lessthan-regular %holesale prices and sells at less than retail # ;arehouse Club + o3-price retailer that sells a limited selection o brand name grocery items1 applicances1 clothing and
OrganiAational 2pproac
%etailing Trends
a hodgepodge o other goods at deep discounts to members %ho pay annual membership ees ! Corporate Chain 'tore / Goluntary Chain # >etailer Cooperative 0 .ranchise rgani7ation 5 Merchandising Conglomerate e% retail orms and shortening lie cycles etail convergence >ise o mega retailers etail stores as communities or hangouts & concept o retailing that states that ne% types o retailers usually begin as lo%-margin1 lo%-price1 lo%-status operations but later evolve into higherpriced1 higher-service operations1 eventually becoming like the conventional retailers they replaced &ll activities involved in selling goods and services to those buying or resale or business use 9ndependently o%ned business that takes title to the merchandise it handles & %holesaler %ho does not take title to goods and %hose unction is to bring buyers and sellers together and assist in negotiation & %holesaler %ho representst buyers or sellers on a relatively permanent basis1 perorms only a e% unctions1 and does not take title to goods ;holesaling by sellers or buyers themselves rather than through independent %holesalers •
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Weel o) %etailing
Wolesaling
Mercant Wolesaler
.roker
2gent
Manu)acturersC $ales .rances and Oces
Topic 1 – Marketing #ommunications he specifc blend o advertising1 sales promotion1 public relations1 personal selling1 and direct marketing tools that the company uses to persuasively communicate customer value and build customer relationships Careully integrating and coordinating the company)s many communications channels to deliver a clear1 consistent1 and compelling message about the organi7ation and its products
"romotion
Integrated Marketing #ommunications &IM#'
! 9dentiy the target audience / 'peciy communications ob4ectives # Design the communications mi2 0 'et the communications budget !
2ID2 Model
&%arenes s
Kno%ledg e
=iking
$referenc e
Convictio n
$urchase
Buyer->eadiness 'tages
"ersonal #ommunication #annels
Word*o)*Mout In/uence
.uAA Marketing
Channels through %hich t%o or more people communicate directly %ith each other1 including ace to ace1 on the phone1 through mail or email1 or even through an 9nternet ?chat) + allo%s personal addressing and eedback $ersonal communication about a product bet%een target buyers and neighbours1 riends1 amily members1 and associates + items %hich are e2pensive1 risky or highly visible Cultivating opinion leaders and getting them to spread inormation about a product or service to others in their
Non*"ersonal #ommunication #annels 2forda8le Metod
"ercentage*o)*$ales Metod
#ompetiti(e*"arity Metods O8@ecti(e*and*Task Metod
communities Media that carry messages %ithout personal contact or eedback1 including ma4or media1 atmospheres1 and events 'etting the promotion budget at the level %hich management thinks the company can a3ord =eads to underspending 'etting the promotion budget at a certain percentage o current or orecasted sales or as a percentage o the unit sales price ;rongly vie%s sales as the cause rather than the result o promotion1 based on availability o unds1 does not provide any basis or choosing a specifc percentage 'etting the promotion budget to match competitors) outlays Developing the promotion budget by defning specifc ob4ectives1 determining the tasks that must be perormed1 and estimating the costs o perorming these tasks
2d(ertising
Ma@or 2d(ertising Decisions
2d(ertising O8@ecti(e
De(eloping te 2d(ertising $trategy
&ny paid orm o non-personal presentation and promotion o ideas1 goods1 or service by an identifed sponsor ! 'etting &dvertising b4ectives / 'etting the &dvertising Budget # Developing the &dvertising 'trategy 0 Avaluating the &dvertising Campaigns 'pecifc communication task to be accomplished %ith a specifc target audience during a specifc period o time ! 9normative / $ersuasive Comparative # >eminder ! Creating advertising messages / 'electing advertising media
>each1 requency and impact o Media types Media vehicles o Media timing o 'hort-term incentives to encourage the purchase or sale o a product or service Build both short-term e2citement and long-term consumer relationships eunds o $rice $acks o $remiums o &dvertising 'pecialties o $atronage >e%ards o o $oint-o-$urchase Displays Contests1 '%eepstakes1
$ales "romotion
#onsumer "romotion Tools
Trade "romotion Tools
.usiness "romotion Tools
De(eloping te $ales "romotion "rogram
"u8lic %elations
"ersonal $elling
$ales 0orce Management
Direct Marketing
.ene6ts to .uyers
corporate image1 and handling or heading o3 unavourable rumours1 stores1 and events $ersonal presentation by the frm)s sales orce or the purpose o making sales and building customer relationships rder aker o rder
Direct connections %ith careully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships Convenient1 easy and private >eady access to many products &ccess to comparative inormation 9nteractive and immediate $ersonali7ed 9nteract %ith customers &void the e2pense o maintaining a store ,igh target-market selectivity $ersonali7ed1 Ie2ible1 easy measurement o results Better prospects even though costlier 'ave on production1 printing and mailing costs Unlimited space in online catalogues &ttracting ne% customers is •
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.ene6ts to $ellers
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Direct*Mail Marketing
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#atalogue Marketing
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