MARKETING

What is Marketing?

 Marketing Organizational function and set of

processes for creating, communicating, and
delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.
Best marketers not only give consumers what
they want but even anticipate consumers’ needs
before those needs surface.
Developing Marketing Strategy

 First,
study and analyze potential target markets
and choose among them.
 Second, create a marketing mix to satisfy the
chosen market.
Target Market

 Target market: Group of people toward

whom an organization markets its goods, services,
or ideas with a strategy designed to satisfy their
specific needs and preferences.
Market Segmentation

 Market segmentation Process of dividing

a total market into several relatively homogeneous
groups.
Segmenting Consumer Markets
 Geographic Segmentation
 Divides market into homogeneous groups on the basis of their locations.
 Also consider size and characteristics of the population, such as age,
ethnicity, and income level.
 Demographic Segmentation
 Divides market on the basis of various demographic or socioeconomic
characteristics.
 Common characteristics include gender, income, age, occupation,
household size, stage in the family life cycle, education, and ethnic
group.
 Marketers avoid stereotyping by breaking large groups into smaller
segments.
Segmenting Consumer Markets
Psychographic Segmentation
 Divides consumer market into groups with similar
psychological characteristics, values, and lifestyles.
 Start blogs to learn more about consumers’ lifestyles.
 Rely on the research of sociologists and psychologists.
Product-Related Segmentation
 Divides market based on buyers’ relationship to the good
or service.
 Benefits sought focuses on the attributes that people
seek in a good or service and the benefits they expect
to receive from it.
 Product usage rate defines such categories as heavy
users, medium users, and light users.
Marketing Mix

 Blending the four elements of marketing strategy—product,

distribution, promotion, and pricing—to satisfy chosen customer
segments.
Marketing Mix

 Product strategy involves the nature of the product

and its package design, brand names, trademarks,
product image, customer service, and other
elements.
 Distribution strategy ensures that customers
receive their purchases in the proper quantities at
the right times and locations.
Marketing Mix

 Promotional strategy blends advertising, personal

selling, sales promotion, and public relations to
achieve its goals of informing, persuading, and
influencing purchase decisions.
 Pricing strategy is setting profitable and justifiable
prices for the firm’s product offerings, sometimes
subject to government scrutiny.
Product
 Refers to the benefits of buying a product
 What need does the service/product fulfill
 Quality
 What will the quality of your service/product be?
 Features
 Howwill your product/service differ from the
competition
 What will you do differently?
 Design
 How is it going to look?
 Consumers often will purchase because “it looks cool”
Product

 Packaging – if your selling a product what image

will the packaging communicate?
 Ifa service – how will the appearance of your
operation communicate an image about your business
 Rangeof Products – what complimentary
products may you offer
 Ifservice: Will you offer other products with your
service
 Example: Think of the range of products that apple
has
Product Line & Product Mix

 Product Line—group of related

products that are physically similar or
are intended for the same market.

 Product Mix—company’s variety of

product lines and individual offerings.
Product Life Cycle

 Product Life Cycle – shows the stages that

products go through from development to
withdrawal
from the market
PLC Stages

 The Stages of the Product Life Cycle:

 Development
 Introduction/Launch
 Growth
 Maturity
 Saturation
 Decline
 Withdrawal
The Development Stage

 Initial
Ideas – possibly large number
 May come from any of the following –
 Market research – identifies gaps in the market
 Monitoring competitors
 Planned research and development (R&D)
 Luck or intuition – stumble across ideas?
 Creative thinking – inventions, hunches?
 Futures thinking – what will people be
using/wanting/needing 5,10,20 years hence?
Introduction/Launch

 Advertising and promotion campaigns

 Target campaign at specific audience?
 Monitor initial sales
 Maximise publicity
 High cost/low sales
 Length of time – type of product
Growth

 Increased consumer awareness

 Sales rise
 Revenues increase
 Profits may be made
 Monitor market – competitors reaction?
Maturity

 Sales reach peak

 Cost of supporting the product declines
 Ratio of revenue to cost high
 Sales growth likely to be low
 Market share may be high
 Competition likely to be greater
 Monitor market – changes/amendments/new
strategies?
Saturation
 New entrants likely to mean market is
‘flooded’
 Necessity to develop new strategies becomes
more pressing:
 Searching out new markets:
 Linking to changing fashions
 Seeking new or exploiting market segments
 Linking to joint ventures – media/music, etc.
 Developing new uses
 Focus on adapting the product
 Re-packaging or format
 Improving the standard or quality
 Developing the product range
Decline and Withdrawal

 Product outlives/outgrows its usefulness/value

 Fashions change
 Technology changes
 Sales decline
 Cost of supporting starts to rise too far
 Decision to withdraw may be dependent on
availability of new products and whether
fashions/trends will come around again?
Product Life Cycle

Sales
Development Introduction Growth Maturity Saturation Decline

Time
Product Identification
 Brand—name, term sign, symbol, design, or some
combination that identifies the products of a firm and
distinguishes them from competitive offerings.
 Brand name—the part of a brand consisting of words
or letters that form a name that identifies and
distinguishes an offering from those of competitors
 Trademark—brand with legal protection against
another company’s use (can include pictorial designs,
slogans, packaging elements, and product features)
Product Identification
 Packages and Labels
 Packaging helps to achieve several goals:
 Protects against damage, spoilage, and pilferage
 Assists in marketing the product

 Label—descriptive part of a product’s package that lists the

brand name or symbol, name and address of the
manufacturer or distributor, product composition and size,
nutritional information for food products, and recommended
uses
Price
 Marketing is responsible for establishing the price of
their service/product
 Must consider the costs of all the inputs (materials,
labour, etc)
 Mark-up Price – How much profit do you want to
make on every product/customer
 Example: Selling Cupcakes
 Every cupcake uses $1 of materials and labour roughly costs
$0.25 to make one muffin
 You must charge at least $1.25 to break-even
Price

 Different Pricing Strategies

 Competition – basing your prices on those of the competition
 Penetration – making your price low while new just to get
some business
 Bundle – putting the product/service with another item and
bundling the prices
 Psychological – making the price say something about the
quality of your product
Price

• Everyday Low Pricing and Discount Pricing—

Strategy devoted to maintaining continuous low prices
rather than relying on short-term price-cutting tactics
• Skimming pricing strategy—sets an intentionally
high price relative to the prices of competing products
Place

 Simply refers to how & where you are going to sell the
product to the consumer

• Distribution Channel—path through which products - and legal

ownership of them - flow from producer to consumers or
business users.
Place

 Direct Distribution – selling your product directly to

the consumer
 Brick & Mortar vs. Virtual Store

 Indirect Distribution – sold through a 3rd party

Place

 Distribution Channels Using Marketing

Intermediaries
 Retailer—channel member that sells goods and services to
individuals for their own use rather than for resale.
 Wholesaling Intermediary—channel member that sells
goods primarily to retailers, other wholesalers, or business
users.
Distribution Channels
Place

 For a service : where are you going to locate in order

to best reach your target market
 You want to be in an area that your target market
frequents
Promotion

 Promotion—communication link between buyer and

seller that performs the function of informing,
persuading, and influencing a purchase decision.

 A successful product or service means nothing unless

the benefit of that product/service can be
communicated to the Target Market

 There are many ways to get the “word out”

Advertising
 Must consider cost and which media is best suited for
communication
 Newspaper
 Television
 Radio
 Magazines
 Direct Mail
 Outdoor Advertising
 Online and Interactive Advertising
 Sponsorship
Personal Selling

 Personal selling—interpersonal promotional process

involving a seller’s face-to-face presentation to a
prospective buyer. Used most often when:
 Customers are relatively few in number and geographically
concentrated
 Product is technically complex, and requires special handling
 Product is high in price
 Product moves through direct-distribution channels
Sales Promotion

 Sales promotion—non-personal marketing activities

other than advertising, personal selling and public
relations that stimulate consumer purchasing and
dealer effectiveness.
 Sales promotion consists of forms of promotion such a
coupons, product samples, and rebates that support
advertising and personal selling.
Public Relations

 Public Relations—organization’s communication and

relationships with its various audiences.

 Publicity—stimulation of demand for a good, service,

place, idea, person, or organization by disseminating
news or obtaining favorable unpaid media
presentations.
Promotional Strategies

 Pushing and Pulling Strategies

 Pushing strategy—promotional effort by a seller to
members of the distribution channel intended to stimulate
personal selling of the good or service, thereby pushing it
through the channel

 Pulling strategy—promotional effort by a seller to stimulate

demand among final users, who will then exert pressure on
the distribution channel to carry the good or service, pulling it
through the distribution channel
Competitive Advantage

 An advantage over competitors gained by offering

consumers greater value than competitors offer
Competitive Analysis

• The process of identifying key competitors;

assessing their objectives, strategies,
strengths and weaknesses, and reaction
patterns; and selecting which competitors to
attack or avoid.