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Business and Its Environment Chapter 3 Marketing Define Marketing Marketing mix Product lifecycle The Boston Consulting Group Matrix Philip Kotler 菲利普·科特勒 现代营销学之父 What is marketing? • Philip Kotler et al. defined marketing as: a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. • 市场营销是个人和集体通过创造并同他 人交换产品和价值以满足需求和欲望的 一种社会和管理过程。 1.发现顾客的需求和欲望 2.创造产品 3.创造价值 4.同他人交换产品和价值 • The basic concepts are human needs, wants and demands. • People satisfy their needs and wants with products and services. • Consumers make buying choices based on their perceptions of the value that various products and services deliver. • Marketing occurs when people decide to satisfy needs and wants through exchange. • A Chery QQ means basic transportation, low price and fuel economy. A Mercedes-Benz means comfort, luxury and status. • Moreover, consumers will compare the value of owning a Mercedes against the value of owning other comparable manufacturers’ models – Lexus, Audi, BMW – and select the one that gives them the greatest delivered value. Marketing mix • In 1953 Neil Borden尼尔·博登 developed the idea of a marketing mix to describe the marketing elements that could affect the way a product performed in the marketplace. • In 1963 Jerome McCarthy杰罗姆·麦卡锡 summarized the marketing mix, or product, price, place, promotion, as the four Ps of marketing. • In 1967 Philip Kotler further confirmed the 4Ps as the core of the marketing mix. Figure 3.1 The marketing mix • Today the marketing mix or 4Ps is one of the traditional tools used to manipulate the organization’s relationship with the external environment. • That is to say, there are four basic ways in which organizations can affect the relationship they have with their customers to increase sales and profitability. • The 4Ps can be manipulated, altered or improved as a product declines. Product • The manufacturer will want to make as much of the product for as long as possible with little new investment or alteration in order to keep sales high and reap profits. • In order to keep sales of the existing product buoyant, it is possible to manipulate certain aspects of that product at little cost in order to offer a newer, fresher and updated product. • The clear aim is to continue to attract new customers and/or tempt existing customers to remain loyal and not be attracted by a competitor’s product. • Product aspects that can be manipulated include style, performance, quality, branding, packaging and after-sales service. • Examples of such product manipulation abound in the washing powder industry. Famous and familiar brands are often relaunched as ‘new’, ‘improved’ or as version two or three. • The basic product is still washing powder, with additional features. Product • Manipulation of the product: allows the manufacturer to claim continual innovation, improvement and customer orientation. requires co-operation between the marketing and operations management departments. Style: LG–- the “chocolate” series KG90(2006) KG90n(2007.2) KG90n is almost the same with KG90 except the golden adornment. This makes the “chocolate” keep high sales. Performance: The Microsoft Windows XP Windows 7 The Microsoft company releases the new Windows 7 operating system. Windows 7 has more functions than windows XP. Now more and more users are choosing Windows 7 to substitute XP. Packaging: DOVE’ s chocolate The better packaging of the chocolate, the higher price will be charged. Organizations always use this measure to increase the products’ profitability. After-sales service: The computer game-- -- The Sims series. After the computer game (not the network games) was sold, customers can download many new resources free which are provided by the manufacturer. The new downloaded resources keep the game fresher. Price • There are various ways in which organizations can use the price they charge to influence sales. • The music industry has used pricing strategies aggressively to influence the positioning of new releases in the pop charts. • Most singles on release are now sold at a discount price in the first few weeks to entice customers to purchase them. Price • The national music charts are compiled out of sales figures at monitored outlets, and these subsidised sales cause new releases to have a high entry position in the pop charts in the first week, which encourages more radio play. • This produces continued sales as radio listeners go out to buy the music they have heard. Price • Special offers and finance deals can be used to affect customers’ buying habits. • Price manipulation depends on co-operation between the marketing and finance departments. Discount ------Watsons In order to increase sales, some products of Watsons have been discounted even 50% to attract more customers. Watsons is a successful retailer that has a Private Brand(PB). So he has more freedom and flexibility in pricing. Promotion • Decisions have to be made concerning the advertising media to be used: Press, Magazines, TV, Radio, Internet. • A combination of advertising and promotional activities is required to create and support a successful product. • To create an awareness and interest in the product and to ensure acceptance by the marketplace. Promotion • In supermarkets with loyalty cards, the offer of extra bonus points on certain products or goods entices customers to switch loyalty from one brand to another or to buy products not normally on their shopping list. Promotion • The launch of new products can be heralded by the delivery to target households of free samples, discount vouchers or promotional literature. • The sponsorship of television programmes is a relatively new activity in the UK following deregulation of broadcast advertising, and is an effective promotional method. • Cadbury, ‘the nation’s favorite chocolate manufacturer, sponsors Coronation Street, one of the leading soap operas, and the holiday company Going Places sponsored Blind Date, where winning contestants are sent off on holiday dates around the world. • Neither of these television programs explicitly advertises the companies’ products, but implicitly links their products with the program in the viewers’ minds. Promotion • Promotion and advertising support a product by: - attracting new customers - reminding consumers making repeat purchases to buy the same brand of product as before (crucial if customer loyalty low) Do you love me? A diamond is forever. Gifts----Pantene Customers could have a 100% opportunity to get a surprise which was provided by Pantene. Organizations always use gifts to encourage customers to buy the products. Place • Manipulation of place is to ensure the right amount of the product is in the right place at the right time • Applies to all stages of the distribution process Distribution Channel Examples • Manufacturer to wholesaler • Wholesaler to retailer • Retailer to customer • Manufacturer to consumer • Business-to-consumer (B2C) • Business-to-business(B2B) Place • Careful positioning of goods in shops is to improve sales • e.g. sweets by the supermarket checkout • e.g. perfume next to the main doors in department stores • e.g. petrol station links one- stop-shop Dennis • Dennis is a famous store in Zhengzhou. The store is always keeping the high sales and attracting a lot of customers everyday. • The placement of goods is very appropriate such as placing the makeup on the first floor. When the customers come into the store, they can see the luxuries at the first sight. This increases the opportunities to be sold. The extended marketing mix: the fifth ‘P’ of marketing • ‘People’ includes: - staff inside the organisation - customers and consumers outside the organization • ‘Manipulation’ of people covers: - effective use and management of staff - sales staff building good relationships with customers Product life cycle • A Harry Potter and the Philosopher’s Stone tee-shirt has a life cycle measurable in months or until the next big film hits the cinema screens and its associated merchandise arrives at the shops. • In contrast, a product like a television set has a product life cycle of many years, due to continued product development in the field of television and broadcasting. • Black-and-white, Colour, Liquid crystal display (LCD), Light emitting diode (LED). Figure: The product lifecycle Introduction • High costs, low sales - and no profit is made • Aim to recover research and development costs • Successful new product will move to growth phase Growth • Steady costs, sales increase rapidly and high profits can be made by pioneering firms • Aim to attract first-time customers and build market share Maturity • Steady costs, sales increase more slowly and profits peak • The outlay is minimal compared with that in the growth stage • Aim to keep existing customers and persuade other consumers to switch from competing brands Saturation • Steady costs, sales peak (no more growth) and reasonable profits • Sales volume may be kept buoyant and loyal customers retained by price competition and special offers, although this will mean reduced profits. • These are competitive options that are easy for rivals to replicate Decline • Low costs, falling sales and falling profits - maybe loss making • Withdraw loss-making product • Keep decline product if it may find a small, loyal, niche market that either breaks even or makes a limited profit The Boston Consulting Group (BCG) matrix 波士顿咨询矩阵 Question marks • High growth markets • Low market share • Another product is current market leader • Unlikely to be profitable • High investment is required if a question mark is to become a market leader Stars • Successful question marks become stars • Stars are market leaders in growth markets • require investment to maintain market leadership in a high growth market • are marginally profitable Cash cows • are mature products • occupy slower growth markets • need less investment • are the most profitable products in a portfolio • are used to fund products in other quadrants Dogs • Occupy no growth markets • Have low market share • Maybe previous cash cows • Maybe marginally profitable • Should be withdrawn before they become loss making A successful product • A successful product moves around the BCG matrix • A question mark to … a star to … • … a cash cow to … a dog or back to a question mark A less successful product • A less successful product remains in right-hand side of the BCG matrix, and is therefore a low cash generator • A question mark may move to … a dog BCG matrix and product lifecycle links • plc BCG ----------- • introduction Q marks ------- • growth Stars ----------- • Cash cow -----maturity and saturation • Dogs ---------- decline Balanced BCG matrix • Tomorrow's products: - question marks and stars • Today's products: - cash cows • Yesterday’s products - dogs Assignment • Check your understanding by naming and illustrating the components of the marketing mix. Use examples where appropriate. • Check your understanding by summarising the key attributes of product in different stages of the product life cycle. Use examples where appropriate. Presentation One minute left!!! Time up!!! • Make a PPT and speech in English. • Support original, reject copy and download. • Work in pairs. In voluntary order. • Have a rehearsal to control your presentation in five minutes. • Speaks clearly and slowly. Uses a loud voice. Looks at the audience. Enthusiastic. • Communication and interaction skills training.
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