MKTG 101 Week 13 Review

MKTG101 Marketing Fundamentals Week 13 General Revision 8/10/2008 MKTG 101 Unit review L13 1 What is Marketing Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably 8/10/2008 MKTG 101 Unit review L13 2 Sales promotion • A short-term initiative to promote sales by augmenting the normal customerperceived value. Benefits Increased benefits and/or Reduced cost equals Augmented value 3 Costs Value 8/10/2008 MKTG 101 Unit review L13 Relationship Marketing • A focus on building an ongoing series of contacts with the customer • The process is based on continually understanding, anticipating and satisfying customer needs 8/10/2008 MKTG 101 Unit review L13 4 Evolution of Marketing Philosophies 1. Production Concept 2. Product Concept 5. Societal Concept Key Marketing Concepts 4. Marketing Concept 8/10/2008 MKTG 101 Unit review L13 3. Selling Concept 5 Societal Marketing • Responsible marketers recognise that their actions have an impact beyond their customers and their organization 8/10/2008 MKTG 101 Unit review L13 6 The Societal Marketing Concept Society (Human Welfare) Consumers (Satisfaction) Societal Marketing Concept Company (Profits) 8/10/2008 MKTG 101 Unit review L13 7 Social Marketing • The application of marketing principles and practices to the maintenance or improvement in a society‟s wellbeing 8/10/2008 MKTG 101 Unit review L13 8 The Marketing Environment Political Macro-environment Economic Micro-environment Customers Competitors Intra-firm Suppliers Technological 8/10/2008 MKTG 101 Unit review L13 Distribution Social 9 Cultural environment • A set of learned responses to recurring situations – It is learned, not genetically transmitted – It is shared by members of a group and defines the boundaries between different groups 8/10/2008 MKTG 101 Unit review L13 10 Actors in Microenvironment Company Suppliers Competitors Marketing Intermediaries Customers Publics 8/10/2008 MKTG 101 Unit review L13 11 The Importance of Information Marketing Environment Competition Why Information Is Needed Strategic Planning 8/10/2008 MKTG 101 Unit review L13 12 Customer Needs Marketing information • MkIS assist Marketers to make informed and therefore better decisions • Data: usually only organised facts • Information: facts that are useful in making a marketing decision • Intelligence: info interrogated to assist in executive decision-making 8/10/2008 MKTG 101 Unit review L13 13 Marketing Research Cycle Feedback Report Presentation Problem Recognition Exploratory Research Problem Definition Research Approval Sample Selection Research MKTG 101 Unit review L13 Methodology Research Design 14 Data Analysis Data Collection 8/10/2008 Planning terms • Vision: statement of “what the company wants to become.” • Mission: “Reason for being in existence?” • Objective: a shorter term goal leading to the achievement of the Mission • Strategy: a description of the method of achieving the objective • Tactic: the short term application of the strategy 8/10/2008 MKTG 101 Unit review L13 15 Marketing plan Executive Summary V, M & Situation Analysis Action Programs Objectives Financial Analysis & Structure determination Monitoring & Assessment MKTG 101 Unit review L13 16 Strategies 8/10/2008 Objectives • • • • • Specific Measurable Achievable Realistic Timely 8/10/2008 MKTG 101 Unit review L13 17 Business Portfolios Market Growth Rate High Stars Question Marks ?? ? ?? Cash Cows Dogs Low High Low The BCG Matrix 8/10/2008 Relative Market Share MKTG 101 Unit review L13 18 Ansoff‟s Growth Vector Matrix PRODUCTS / SERVICES Present Present New MARKET Market penetration Product / Service development Market development New Diversification Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29 8/10/2008 MKTG 101 Unit review L13 19 What is a Consumer Market? • The consumer market consists of all the individuals and households who buy or acquire goods and services for personal consumption. 8/10/2008 MKTG 101 Unit review L13 20 A Model of Buyer Behaviour 8/10/2008 MKTG 101 Unit review L13 21 Factors Influencing Consumers Psychological •Motivation •Perception •Learning (memory) •Beliefs & attitudes •Personality & self-concept Personal •Age & lifecycle stage •Occupation •Education •Economic situation Social •Household type •Reference groups •Roles & status Marketing programs •Marketing objectives •Marketing strategy •Marketing mix Buyers’ responses •Product service & category selection BUYER DECISION •Brand selection PROCESS Experiences •Reseller selection •Purchase timing & Lifestyle repurchase intervals •Purchase amount Cultural •Culture •Subculture •Social Class 22 Consumer Environmental influences •Economic •Technological •Political 8/10/2008 MKTG 101 Unit review L13 Perceptual Selectivity All Stimuli Selective Exposure Selective Attention Selective Interpretation Retention Discarded 8/10/2008 MKTG 101 Unit review L13 23 Consumer‟s state of mind Awareness Interest Desire Action 8/10/2008 MKTG 101 Unit review L13 Strong, 1925 24 The Buyer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behaviour 8/10/2008 MKTG 101 Unit review L13 25 Business-to-Business Markets B2B customer behaviour refers to customers who purchase products for resale in some form or for the satisfaction of needs other than their own. Characteristics include: Purchase Very large in value terms – Involves Complex products – Within Complex business structures 8/10/2008 MKTG 101 Unit review L13 26 Characteristics of Business Markets Market Structure and Demand Other Characteristics Characteristics of Business Markets Nature of Buying Unit Types of Decisions and Decision Process 8/10/2008 MKTG 101 Unit review L13 27 Stages in the Business Buying Process Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review 8/10/2008 MKTG 101 Unit review L13 28 Steps in Segmentation, Targeting and Positioning 6. Develop Marketing Mix for Each Segment 5. Develop Positioning for Each Segment 4. Select Target Segment(s) 3. Develop Measures of Attractiveness 2. Develop Profiles of Segments Market Positioning Market Targeting 1. Identify Bases for Segmentation 8/10/2008 Market Segmentation MKTG 101 Unit review L13 29 Effective Segmentation Measurable Actionable Requirements for Effective Segmentation Accessible Substantial 8/10/2008 MKTG 101 Unit review L13 30 Market Coverage Strategies Company Marketing Mix A. Undifferentiated Marketing Market Company Mix 1 Segment 1 Segment 2 Segment 3 Company Mix 2 Company Mix 3 B. Differentiated Marketing Company Marketing Mix 8/10/2008 Segment 1 Segment 2 Segment 3 C.MKTG 101 Unit review L13 Concentrated Marketing 31 Promoting Differences Important Criteria for Determining Which Differences to Promote Profitable Distinctive Affordable Superior Preemptive 8/10/2008 Communicable 32 MKTG 101 Unit review L13 Product/Service • Anything that can be offered to customers for the satisfaction of their needs These are really just perceived as a bundle of benefits 8/10/2008 MKTG 101 Unit review L13 33 Product Levels Augmented Product Installation Packaging Brand Name Delivery & Credit Quality Core Benefit or Service Features AfterSale Service Styling Warranty Actual Product 8/10/2008 MKTG 101 Unit review L13 Core Product 34 Consumer Product Classifications Shopping Convenience Specialty Unsought 8/10/2008 MKTG 101 Unit review L13 35 Services • Intangible products • A service is an activity purchased from the supplier by the customer that usually does not result in the ownership of a physical asset 8/10/2008 MKTG 101 Unit review L13 36 Service types • Instrumental service: work performed by the supplier to achieve a customer goal without the direct participation of the customer • Consumatory service: the consumer is directly involved in the activity 8/10/2008 MKTG 101 Unit review L13 37 Characteristics of Services Equipment based: People based: • Automated ATM, Electricity supply •Unskilled workers Taxi •Skilled workers Airline •Unskilled labour Prison warder •Skilled labour Electrician •Professional Accountant Intangibility Inseparability Variability Perishability 8/10/2008 MKTG 101 Unit review L13 38 Individual Product Decisions Product Attributes Branding Packaging Labelling Product Support Services 8/10/2008 MKTG 101 Unit review L13 39 Brands • A promise of consistent quality • The brand is a symbol for the characteristics of the product as perceived by the market. • A name, term, sign, symbol or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors 8/10/2008 MKTG 101 Unit review L13 40 Major Brand Decisions To Brand or Not to Brand Brand No Brand Brand Name Selection Selection Protection Brand Sponsor Manufacturer’s Brand Private Brand Licensed Brand Brand Strategy New Brands Line/Brand Extensions Multibrands Brand Repositioning 8/10/2008 Brand Repositioning MKTG 101 Unit review L13 No Brand Repositioning 41 Packaging and labelling Key packaging and labelling functions: • Containment: ensuring the product reaches the point of consumption in its entirety • Protection: ensuring the product reaches the point of consumption in suitable condition 8/10/2008 MKTG 101 Unit review L13 42 Packaging and labelling contd • Storage: ensuring the product can be stored and retrieved when needed • Usage facilitation: minimising the difficulties associated with consuming the product • Promotion: packaging provides a large, long term, point of purchase and point of consumption communication vehicle. 8/10/2008 MKTG 101 Unit review L13 43 Product Life Cycle Sales and Profits ($) Sales Profits Product Development Stage Introduction Growth Maturity Time Decline Losses/ Investments ($) 8/10/2008 MKTG 101 Unit review L13 Sales and Profits Over the Product’s Life From Inception to Demise 44 8/10/2008 MKTG 101 Unit review L13 45 8/10/2008 MKTG 101 Unit review L13 46 New Product Development Process Marketing Strategy Business Analysis Product Development Concept Development and Testing Idea Screening Test Marketing Idea Generation 8/10/2008 MKTG 101 Unit review L13 Commercialisation 47 What is Price • Price is the amount of money charged for a product or service. • More broadly, price is the sum of the values consumers exchange for the benefits of having or using the product or service. 8/10/2008 MKTG 101 Unit review L13 48 General Pricing Approaches • Cost-Plus Pricing • Breakeven Analysis and Target Profit Pricing • Economists‟ market price model • Value Based Pricing • Competitor Based Pricing • Special situation pricing 8/10/2008 MKTG 101 Unit review L13 49 Value-Based Pricing Cost-Based Pricing Value-Based Pricing Product Cost START Customer Value Price Value Price Cost Product MKTG 101 Unit review L13 50 Customers 8/10/2008 New product pricing strategies • Penetration: launch onto the market at the lowest long-term sustainable price – Strong price elasticity of demand – No market price segments – Non-premium marketing mix – Potential competitors anticipated 8/10/2008 MKTG 101 Unit review L13 51 Market conditions • Skimming: launch onto the market at the highest price, then slowly reduce price over time – Demand inelastic – Significantly different segments – Competitive entry unlikely 8/10/2008 MKTG 101 Unit review L13 52 Product Mix Pricing Strategies Product Line Pricing Setting Price Steps Between Product Line Items Captive-Product Pricing Pricing Products That Must Be Used With The Main Product Product-Bundle Pricing Pricing Bundles Of Products Sold Together Optional-Product Pricing Pricing Optional Products Sold With The Main Product By-Product Pricing Pricing Low-Value By-Products To Get Rid of Them 8/10/2008 MKTG 101 Unit review L13 53 Marketing Channel Functions Risk Taking Information Financing Promotion Physical Distribution Contact Negotiation 8/10/2008 MKTG 101 Unit review L13 Matching 54 Channel Levels and Channel Conflict Consumer Marketing Channels Direct M Retail M Wholesale-Retail B2B2B2C B2C C B2B2C R    C M   W B2B2J2B2C R C Wholesale-Jobber-Retail M 8/10/2008 W  J  R C 55 MKTG 101 Unit review L13 Conventional vs Vertical Networks Conventional Manufacturer Vertical Manufacturer Wholesaler Retailer Retailer Consumer 8/10/2008 Consumer MKTG 101 Unit review L13 56 Channel Alternatives Intensive Channel Selective Distribution Strategies Exclusive 8/10/2008 MKTG 101 Unit review L13 57 Retailer • An intermediary that deals directly with consumers • Retailers are grouped according to several criteria depending on the situation: 8/10/2008 MKTG 101 Unit review L13 58 Retailing Type of Store Cluster Amount of Service Control of Outlets Classifications of Retail Outlets Product Line Sold Relative Prices 8/10/2008 MKTG 101 Unit review L13 59 Control of Outlets Merchandising Conglomerate Corporate Chain Franchise Categories by Control of Outlets Retailer Cooperative Voluntary Chain 8/10/2008 MKTG 101 Unit review L13 60 Wholesaler • A distribution channel intermediary • An organization engaged in selling in larger quantities to other businesses for their use or resale 8/10/2008 MKTG 101 Unit review L13 61 Integrated marketing communications Objective: to have all of a company‟s marketing and promotional activities project a consistent, unified image to the marketplace 8/10/2008 MKTG 101 Unit review L13 62 The Communications Mix Advertising Personal Selling Public Relations Sales Promotion 8/10/2008 MKTG 101 Unit review L13 63 The Communication Process Noise Noise Noise Noise Noise Noise Noise Sender Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Encoding Feedback Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Message The Noise Noise Noise Noise Noise Noise Noise Channel Media Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Response Decoding Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Receiver 8/10/2008 MKTG 101 Unit review L13 64 Noise Noise Noise Noise Noise Noise Noise The 5 Ms • Mission – Setting objectives – Target audience – Response • Media – Reach and frequency – Media selection • Money – Setting the budget • Message – Content – Structure – Execution • Measurement – Collecting feedback – Assessment 8/10/2008 MKTG 101 Unit review L13 65 Message Execution Testimonial Evidence Scientific Evidence Slice of Life Technical Expertise Personality Symbol Typical Message Execution Styles Lifestyle Fantasy Mood or Image Musical 8/10/2008 MKTG 101 Unit review L13 66 Selecting Advertising Media Media Timing Key Issues in Selecting Media Reach Media Vehicles Frequency Media Impact 8/10/2008 MKTG 101 Unit review L13 67 Public relations • Building good relations with the company‟s various publics by obtaining favourable publicity, building up a good „corporate image‟, and handling or heading off unfavourable rumours stories or events – Objective: Achieving favourable coverage of the company or its products in media not paid for by the sponsor 8/10/2008 MKTG 101 Unit review L13 68 Public Relations • Non-bought space/time • Standard message despatched by sender • Uncontrolled message • Unidentified sponsor 8/10/2008 MKTG 101 Unit review L13 69 Sales Promotion A short term initiative designed to boost a business by increasing the perceived builtin value of the product mix on a temporary basis 8/10/2008 MKTG 101 Unit review L13 70 Sales promotion assessment • Achievement of the objectives, within the time span and budget • The quantitative, net improvement in sales due to the promotion alone and the time over which the improvement was sustained 8/10/2008 MKTG 101 Unit review L13 71 F2F selling process The Opening Dealing with Objections Negotiation Need Identification Closing the Sale Presentation & Demonstration 8/10/2008 MKTG 101 Unit review L13 Follow up 72 Ethics • A failure to recognise another person‟s right to their autonomy, safety and privacy • The intention is to undermine the other person‟s right to make an informed, voluntary decision • To induce the consumer to engage in a transaction they might not have engaged in had the information and power balance been more even 8/10/2008 MKTG 101 Unit review L13 73 Ethical issues • Deception: inducing the customer to enter at transaction based on wrong or incomplete information • Exploitation: taking advantage of the customer‟s reduced negotiating power • Manipulation: taking advantage of the customer‟s weakness or vulnerability • Intimidation: taking advantage of the customer‟s lesser power in the situation 8/10/2008 MKTG 101 Unit review L13 74