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Transcript of Marketing
Marketing is a planning process that...
Identifies the needs and wants of potential customers
Helps create a product or service
to meet these requirements
Tries to convince potential customers to buy the new product
The Production Era
Marketing was largely a distribution function
Emphasized on producing as many goals as possible and getting them to markets
The Sales Era
Emphasis turned to selling and advertising to persuade customers to buy the existing goods produced by mass production
The Marketing Concept Era
businesses recognized the need to be responsive to customers' needs
The Customer Relationship Era
The companies focused on building customer loyalty and developing relationships with clients
(1) A Customer Orientation
(2) A Service Orientation
(3) A Profit Orientation
Customer relationship management (CRM):
Learning as much as possible about customers to satisfy them and exceed their expectations with goods and services
Non-Profit Organizations Prosper from Marketing
An organization that doesn't seek profit.
(e.g., charities, churches, schools, etc..)
An organization that seeks profit.
(e.g., retail stores, restaurants, etc..)
The Marketing Mix
The marketing mix is the ingredients that go into a marketing program: product, price, place, and promotion
The Four P’s are:
These four factors are further explained as:
1. Designing a product customers are willing to purchase
2. Setting a price for the product which customers are willing to buy
3. Providing a place where customers can conveniently obtain the product
4. Promoting the product so that customers know it exists
Applying the Marketing Process
There are 9 steps to a marketing process
• 2 ways to create an idea:
- Product-driven – develop an idea of a product first and then seek a marketing opportunity
- Market-pulled – first identify a problem in the market and then develop an idea to resolve or satisfy it
Keep this in mind.
3. Identify a target market
5. Determine a brand name and design a package
• Now you need a short catchy name for the restaurant
• This is also where you create your brand name
: any word, device (design, shape, sound, or colour), or combination of these used to distinguish a seller’s goods or services from those of competitors
6. Set a price
: the money or other consideration exchanged for the ownership or use of a good or service
• Prices depend on many factors: costs of production, distribution, and promoting the product
8. Design a promotional program
: all of the techniques sellers use to motivate customers to buy their products
• Advertising, personal selling, public relations and various sales promotions , e.g. coupons or samples
2. Conduct Research
• Target market:
Identify people with a particular need or want for a product or service
4. Design a product to meet the need based on research and then conduct product testing
: is any physical good or service that satisfies a want or need.
: something that is tangible, you can feel it
: something that is intangible where you pay someone for their service
7. Select a distribution
• Figure out the best way to get your products to consumers
• Getting the product to consumers when and where they want it is critical to market success
9. Build a relationship with customers
• Responding to suggestions consumers may have
• Listening to customers and responding to their needs is the key to marketing
THE CONSUMER MARKET
• Consumer market consists of more than 6 billion people in global markets.
• Consumer market is divided into several groups to serve, develop product, and services to their needs.
• Dividing the total market into groups whose members have similar characteristics is called Market Segmentation.
• Marketing directed toward those “market segmentation” an organization decides it can serve profitably is called Target Marketing.
SEGMENTING THE CONSUMER MARKET
• Dividing the market by geographic areas into cities, counties, provinces, etc. is called
• Segmentations by age, income and education level are ways of
• Personality, lifestyle, activities, interest and opinions are all based on
is when the market is based on behaviour with or toward a product.
• When considering segmentations strategy, it could be not segmenting the market at all. Instead it goes after total market (everyone).
REACHING SMALLER MARKET SEGMENTS
• The process of finding small but profitable market segment and designing products for them is a
One-to-One Individual Marketing
means developing a unique mix of goods and services for each
MOVING TOWARD RELATIONSHIP MARKETING
• Trying to sell products or services includes using mass media such as the TV, radio, newspaper, etc.
• Developing products and promotions to please large groups of people is called
• The goal is to keep individual customers over time by offering them new products that meet their requirements exactly. This is a R
THE CONSUMER DECISION-MAKING PROCESS
There are many influences on consumer as they decide which goods and services to buy. Marketers have some influence, but it’s not usually as strong as sociocultural influence. Helping consumer in their information search and their evaluation of alternatives is a major function of marketing.
Several influences involve:
• Marketing Mix influence
• Four P’s
• Psychological influence
• Situational influence
• Problem recognition
• Information search
• Alternative evaluation
• Purchase decision/or no purchase
• Post purchase evaluation
BUSINESS TO BUSINESS MARKET
The Business to Business (B2B) refers to business that’s conducted between companies
Manufactures, intermediaries, institutions and the government are included in The B2B Market.
In this market, products are sold and resold several times before sold to the ultimate consumer.
Factors that make Business to Business Market Different
1. Compared to the Consumer Market, the Business to Business Market has fewer customers.
2. The sizes of business customers are large.
3. B2B market is more focused geographically.
4. Business buyers are more rational.
5. Sales tend to be direct.
6. There’s more emphasis on personal selling.
The Marketing Research Process
Define the problem
Identify management objectives
Develop research objectives
Decide on the data collection techniques and procedures
Develop all research instruments and materials
Plan the sampling procedures
Collect the data
Analyze the data
Prepare and present the research report
Identify the needs for the research
Secondary Data is when one collects data that has already been looked up on by others and published in books and available online.
Secondary Data is useful but its better to gather the information first to avoid unnecessary expenses.
Primary Data is information you gathered yourself.
One of the techniques for Primary Data is Observation. When collecting information through observation trained people follow potential buyers into supermarkets and see their behaviors of buying, comparing prices and feeling the weight of products.
Primary Data can be gathered by getting consumers to answer many questions called surveys. Phone surveys through text, mail surveys and online surveys are the most common survey’s used today.
The Marketing Environment
Managing the Marketing Mix: 4 P's
Product Development and The Total Product Offer
• International competition today is so strong that Canadian businesses could lose part of the market to foreign producers if they aren’t careful
: Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs
Developing a Total Product Offer
Total Product Offer
: Also called a value package means everything that consumers evaluate when deciding whether to buy something
Product Lines and the Product Mix
is a group of physically similar products with similar competitors
is a company’s combination of product lines
is the creation of real or perceived product differences
• Marketers use a mix of pricing, advertising, and packaging to make their products seem unique and attractive
Packaging Changes the Product
• 1. To protect the goods inside, stand up under handling and storage, be tamper proof, deter theft, and yet be easy to open and use
• 2. To attract the buyer’s attention
• 3. To describe the contents
• 4. To explain the benefits of the good inside
• 5. To provide information on warranties, warnings, and other consumer matters
• 6. To indicate price, value, and uses
Branding and Brand Equity
is a brand that has been given exclusive legal protection for both the brand name and the pictorial design.
Generating Brand Equity and Loyalty
is the combination of factors – such as awareness, loyalty, perceived quality, images, and emotions – that people associate with a given brand name.
• The core of brand equity is
, which is the degree to which customers are satisfied, like the brand, and are committed to further purchases.
(known as a product manager in some firms) has direct responsibility for one brand or one product line
The Purpose of Pricing
To reach a target profit
To build traffic
To create a greater market share
To build a reputation or image
To further social goals
Three Major Approaches to Pricing Strategy
: the price depends on the total expenses to provide/create the product.
: pricing is based on the consumer demand.
: pricing depends on what other competitors are doing.
What is the Break Even Analysis?
It is when total revenue equals total costs
Purpose is to determine profitability at different levels of sales
When revenue exceeds cost, that is the point that is profitable
Different types of Costs:
1. Total fixed costs: all expenses that stay the same no matter how many sales are made.
2. Variable costs: expenses that change depending on the level of production.
The formula to determine the Break-even point is :
Break-even point (BEP)
= Total fixed costs (FC)
Price of one unit (P) – Variable cost (VC) of one unit
Setting a Price for New Products
There are two strategies to determine a price for new products:
1. Skimming price strategy: product price is high while there’s a few competition
2. Penetration price strategy: product price is low to attract customers.
Setting a Retailer Price
Retailers mainly use two pricing strategies:
Everyday low pricing
: having low prices but no special sales or promotions
: having high prices but having special sale and promotions.
This is to differentiate products, because prices can be so easily matched.
Few competitors can match non-pricing competition
This also avoids price wars with competitors.
It creates more focused on the product.
For example: promotions, sales, features of the product, location, brand, and information about the product.
What are Marketing Intermediaries?
Marketing Intermediaries are firms in the middle that link producers, businesses, and the ultimate consumers.
They help transport and store goods from manufacturers to consumers.
A chain or series of marketing intermediaries are called Channels of Distribution.
Channels are broken into direct and indirect forms
Types of Marketing Intermediaries
Agents and Brokers
: they bring buyers and sellers together and help with the negotiating on the exchange of the product
: a firm that sells to other businesses
: a firm that sells to the ultimate or final consumers
The Importance of Intermediaries
They perform marketing tasks, like transporting, storing, selling, advertising, and relationship building.
It’s more efficient and effective. More Convenient and cheaper
And ensures communication and money flow.
Retailers sell to ultimate consumers – the ones that bring foods and services to your neighborhood and make them available day and night
Retail Store example: Metro - sell mostly food with other non-food products
Retailing Distribution Strategy
Marketers must select the right retailers to sell their products
Different products have different retail distribution strategies
: put products into as many retail outlets as possible E.g. vending machines
: sends products to only a preferred group of retailers in an area E.g. Manufacturers of shopping goods (appliances, furniture, etc.)
: sends products to only one retail outlet in a given geographic area E.g. Auto manufacturers – they have exclusive rights to sell the product; large inventory, give exceptional service, and pay more attention to this brand
This is retailing done outside a traditional store
Delivering the goods and providing helpful service
: sale of goods and services by phone
Marketing by phone
E.g. would sell a catalogue to consumers and let them order by calling a toll-free number
Vending Machines, Kiosks, and Carts
Marketing by placing products in convenient locations
Marketing by approaching consumers at their homes or work
Promotion and the Promotion Mix
: Combination of promotional tools an organization uses
Integrated Marketing Communication (IMC)
: combines all promotional tools into one comprehensive and unified promotional strategy
The idea: use all promotional tools and company resources to create a positive brand image and meet the strategic marketing and promotional goals of the firm
The Five Traditional Promotional Tools
Paid, non- personal communication through various media by organizations and individuals who are in some way identified in the advertising message
: developing a product and promotional strategy that can be implemented worldwide
Advertising today is moving from globalism (one ad for everyone in the world) to regionalism (specific ads for each country or for specific groups within a country)
Types of advertisements include: newspapers, television, radio, magazines, outdoor, direct mail, and the internet
* The most effective media are often expensive, while the inexpensive media may not reach your market
The face-to-face presentation and promotion of goods and services
THE BUSINESS-TO-CONSUMER SALES PROCESS
o Approach: show the customer you are there to help, and that you are friendly and knowledgeable
o Ask Questions: figure out what the customer wants
o Presentation: based on what the customer says, you show them how the product meets their needs and answer questions to choose the best product for them
o Trial Close: an attempt to make a sale, by not being too pushy
o After-sale follow up: usually neglected- call customer to make sure the product is delivered on time and make sure they are satisfied with their purchase
Public Relations (PR)
the management function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance
: any information about an individual, product, or organization that’s distributed to the public through the media and that’s not paid for or controlled by the seller
the promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities
: a promotional tool in which a company lets consumers have a small sample of a product for no charge
Uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet