A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. Two interrelated parts are needed. 1. Target market- a fairly homogenous group of customers to whom a company wishes to appeal 2. Marketing mix- the controllable variables the company puts together to satisfy this target group Developing Marketing Mixes For Target Markets There are many possible ways to satisfy the needs of target customers. A product can have many different features and quality levels. Service levels can be adjusted. The package can be of various sizes, colors, materials. The brand name and warranty can be changed. Various advertising media- newspapers, magazines, radio, television, billboards- may be used. A company’s own sales force can be used. Different process can be charged. Price discounts may be given, and so on. With so many possible variables, is there any way to help organize all these decisions and simplify the selection of marketing mixes? The answer is YES THE FOUR Ps Target Market The target market is not part of the marketing mix. The customer should be the target of all marketing efforts. The target market are the specific customers. Product - the good or service for the target’s needs The product decision area is concerned with developing the right product for the target market. This offering may involve a physical good, a service or a blend of both. Place -The reaching target -Place is concerned with all the decisions involved in getting the right product to the target market’s place. A product isn’t much good to a customer if it isn’t available when and where it’s wanted. Price -Making it right -In setting a price, they must consider the kind of competition in the target market- and the cost of the whole marketing mix. It is a must to know current practices as to markups, discounts and other terms of sale. Promotion -telling and selling the customer It is concerned with telling the target market about the right product. Promotion includes personal selling, mass selling and sales promotion. It is the marketing manager’s job to blend these methods. Promotion Promotion is communicating information between seller and potential buyer to influence attitudes and behavior. Promotion has been defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or promote an idea. It is concerned with telling the target market about the right product. Promotion comes from a Latin word meaning “to move forward.” the meaning has narrowed so that promotion refers to communication undertaken to persuade others to accept ideas, concepts or things. ROLES OF PROMOTION THAT PLACES IN MARKETING Promotion is an important part of any marketing mix. Most consumers and intermediate customers can choose from many products. http://www.free-power-point- templates.com/wp- content/uploads/2009/04/186_example.jpg TYPES OF PROMOTION Five Major Types of Promotion • Advertising • Direct Marketing • Sales Promotion • Publicity/Public Relations • Personal Selling Promotional mix- the basic tools used to accomplish an organizations communication objectives Advertising Defined as any paid form of non personal communication about an organization, product, service or idea by identified sponsor. Types of Advertising Paid Non Personal • The paid aspect reflects • Advertising that involves the fact that space or mass media that can time for an advertising transmit a message to large groups of individuals, often message generally must at the same time. be brought. • E.g. public service announcement, whose advertising space or time is donated by the media. Direct Marketing • One of the fastest-growing sectors in which organizations communicate directly with target customers to generate a response and transaction. • One of the major tools of direct marketing is direct- response advertising, whereby a product is promoted through an ad that encourages the consumer to purchase directly from the manufacturer. • Direct- Marketing tools and techniques are also being used by companies that distribute their products through the distribution channels or have their own sales force. Sales Promotion • Generally defined as those marketing activities that provide extra value or incentives to the sales force, distribution, or the ultimate consumer and can stimulate immediate sales. Two Major Categories of Sales Promotion Consumer-Oriented Sales Trade-Oriented Sales Promotion Promotion • Targeted to the ultimate • Targeted toward user of a product or service and includes marketing couponing, sampling, intermediaries premiums, rebates, such as contests, sweepstakes and various point-of- wholesalers, purchase materials. distributors and retailers. Publicity • Refers to non personal communications regarding an organization, product , service or idea not directly paid for or run under identified sponsorship. • An advantage of publicity over other forms is credibility. • Publicity is not always under the control of an organization and is sometimes unfavorable. Public Relations • Defined as the management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest , and executes a program of action to earn public understanding and acceptance. • Many firms have begun marketing PR an integral part of their predetermined marketing and promotional process . Personal Selling • A form of person-to-person communication in which a seller attempts to assist and persuade prospective buyers to purchase the company’s product or service to act on idea. • It also involves more immediate and precise feedbacks because the impact of the sales presentation can generally be assessed from customers reaction. Economic Effects of Advertising • Effects on Consumer Choice • Effects on Competition • Effects on Product Costs and Prices Effects on Consumer Choice Differentiation Brand Loyalty • Whereby the products or • Enables large national services or large advertisers advertisers to gain control are perceived as unique or of market , usually at the better than competitors. expense of smaller brands. Effects on Competition Barrier to Entry Economies of Sales • They argue that power in • Large advertisers clearly the hands of large firms enjoy certain competitive with huge advertising advantages . budgets, makes it difficult to enter Effects on Product Costs and Prices • Economist James Ferguson argues that advertising cannot increase the cost per unit of quality to the consumers because if it did, consumers would not continue to respond positively to advertising. Summarizing Economic Effects • Advertising Equals Market Power • Advertising Equals Information Public Relations The management function which evaluates public attitudes, identifies the policies and procedures of an organization with public interest, and executes a program of action to earn public understanding and acceptance. Publicity Refers to the generation of news about a person, product, or service that appears in broadcast or print media. PR Generating Publicity • Credibility-because public relations communications are not perceived in the same light as advertising- that is, public does not realize the organization either directly or indirectly paid for them- they tend to have more credibility. • Cost-in both absolute and relative terms, the cost of public relations is very low, especially when the possible effects are considered. • While a firm can employ public relations agencies and spend MILLIONS on PR. • Lead Generation-information about technological innovations, medical breakthroughs, and the like results almost immediately in a multitude of inquiries. These inquiries may give the firm some quality sales leads. • Ability to reach specific groups- because some products appeal only to small market segments, it is not feasible to engage in advertising and promotions to reach them. If the firm does not have the financial capabilities to engage in promotional expenditures , the best way to communicate to these groups is through public relations. • Image building- effective public relations helps to develop a positive image for the organization. A strong image is an insurance against later misfortunes. Personal Selling Involves selling through a person-to- person communications process. Nature of Personal Selling • Provider Stage. • Persuader Stage. Selling activities are Selling involves an limited to accepting attempt to persuade orders for the supplier’s market members to buy available offering and the supplier’s offerings. conveying it to the buyer. • Prospector Stage. • Problem-solver Stage. Activities include seeking Selling involves obtaining out selected buyers who the participation of are perceived to have a buyer’s to identify their need for the offering as problems, which can be well as the resources and translated into needs, the authority to buy it. and then presenting a selection from the supplier’s offerings tat corresponds with those needs and can solve those problems. • Procreator Stage Selling defines the buyer’s problems or needs and their solutions through active buyer-seller collaboration and then creates a market offering uniquely tailored to the customer. Advantages of Personal Selling • Allowing for two-way • Tailoring the message. interaction. The ability Because of the direct to interact with the interaction, messages receiver allows the can be tailored to the sender to determine receiver. This more the impact of the precise message message. Problems in content lets the sender comprehension can be address the consumer’s resolved. specific concerns. • Lack of Distraction. • Involvement in the Decision Process. The likelihood of Through consultative distractions is selling and minimized and the relationship buyer is generally marketing, the seller paying attention to the becomes more of a sales message. partner in the buying decision process, acting in conjunction with the buyer to solve problems. Disadvantages of Personal Selling • Inconsistent Messages. • High Cost. Earlier we sated that As the cost per sales the ability to adapt call continues to climb, the message to the the marketer may find receiver is distinct mass communications a advantage of more cost-effective personal selling. But alternative. the lack of standardized message becomes a disadvantage. • Poor reach. • Potential Ethical Problems. Personal selling cannot Because the manager reach as many does not have complete members of the target control over the audience as other messages the sales elements. Even if people communicate money is no object, the and because income sales force has only so and advancement are many hours it can often directly tied to reach in a given time. sales, sometimes sales reps tend to break the rules.