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Slide 1: Think Marketing ! Produced by www.studyMarketing.org 1 www.studyMarketing.org

Slide 2: Contents 1. Marketing Mix and Key Marketing Activities 2. Developing Market Segmentation 3. Product Planning and Development 4. Promotion Mix : Advertising, Publicity, Personal Selling and Sales Promotion 5. Distribution Planning and Pricing Strategy If you find this presentation useful, please consider telling others about our site (www.studyMarketing.org) 2 www.studyMarketing.org

Slide 3: You can download this presentation at: www.studyMarketing.org Please visit www.studyMarketing.org for more presentations on strategy, marketing, branding, and innovation 3 www.studyMarketing.org

Slide 4: Marketing Mix and Market Segmentation 4 www.studyMarketing.org

Slide 5: Marketing Credo There is only one valid definition of business purpose : to create a customer Peter Drucker 5 www.studyMarketing.org

Slide 6: Marketing Mix Product Price Target Market Place Promotion 6 www.studyMarketing.org

Slide 7: Key Marketing Activities Consumer Analysis Distribution Product Planning Planning Promotion Price Planning Planning 7 www.studyMarketing.org

Slide 8: Key Marketing Activities Examination and evaluation of consumer Consumer Analysis characteristics, needs, and purchase processes Development and maintenance of products, product assortments, product positions, Product Planning brands, packaging, options, and deletion of old products Outlines price ranges and levels, pricing Price Planning techniques purchase terms, price adjustments, and the use of price as an active or passive factor 8 www.studyMarketing.org

Slide 9: Key Marketing Activities Establishment of channel relations, physical Distribution distribution, inventory management, Planning warehousing, transportation, allocation of goods, and wholesaling Combination of advertising, publicity, Promotion personal selling, and sales promotion to Planning drive sales revenue 9 www.studyMarketing.org

Slide 10: Product/Market Matrix Existing Products New Products Market Product Existing Markets Penetration Development Market Diversification New Markets Development 10 www.studyMarketing.org

Slide 11: Product/Market Matrix • The firm seeks to achieve growth with Market existing products in their current market Penetration segments, aiming to increase its market share • Effective when the market is growing or not yet saturated • The firm seeks growth by targeting its Market existing products to new market segments Development • Effective when a local or regional business looks to wider its market, new market segments are emerging due to changes in consumer life-style/demographics, and innovative uses are discovered for a mature product 11 www.studyMarketing.org

Slide 12: Product/Market Matrix • The firms develops new products Product targeted to its existing market segments Development • Effective when the firm has a core of strong brands • The firm seeks growth by targeting its Diversification existing products to new market segments • Diversification is utilized so that the firm does not become overly depend- ent on one product line 12 www.studyMarketing.org

Slide 13: Market Segmentation The division of a market into Market different homogeneous groups of Segment consumers Should be: • measurable • accessible by communication and distribution channels • different in its response to a marketing mix • durable (not changing too quickly) • substantial enough to be profitable 13 www.studyMarketing.org

Slide 14: Types of Market Segmentation Based on regional variables such as Geographic region, climate, population density, and population growth rate. Based on variables such as age, gender, Demographic ethnicity, education, occupation, income, and family status 14 www.studyMarketing.org

Slide 15: Types of Market Segmentation Based on variables such as values, Psychographic attitudes, and lifestyle Based on variables such as usage rate Behavioral and patterns, price sensitivity, brand loyalty, and benefits sought 15 www.studyMarketing.org

Slide 16: Step in Planning A Segmentation Strategy Determining Developing Analyzing characteristics and consumer consumer needs of consumers group similarities and for the product profiles differences category of the company Establishing Selecting Positioning an consumer company’s appropriate segment (s) offering in marketing relation to plan competition. 16 www.studyMarketing.org

Slide 17: Product Planning and Development 17 www.studyMarketing.org

Slide 18: Products : Types of Goods Convenience Goods Shopping Types of Goods Goods Specialty Goods 18 www.studyMarketing.org

Slide 19: Convenience Goods • Those purchased with a minimum of effort, Convenience because the buyer has knowledge of Goods product characteristics prior to shopping • The consumer does not want to search for additional information (because the item has been bought before) and will accept a substitute rather than have to frequent more than one store 19 www.studyMarketing.org

Slide 20: Convenience Goods • Staples are low-priced items that are Convenience routinely purchased on a regular basis, Goods such as detergent, milk, and cereal • Impulse goods are items that the consumer does not plan to buy on a specific trip to a store, such as candy, a magazine, and ice cream • Emergency goods are items purchased out of urgent need, such as an umbrella during a rainstorm, a tire to replace a flat, or aspirin for a headache 20 www.studyMarketing.org

Slide 21: Shopping Goods • Those for which consumers lack Shopping sufficient information about product Goods alternatives and their attributes, and therefore must acquire further knowledge in order to make a purchase decision 21 www.studyMarketing.org

Slide 22: Shopping Goods • For attribute-based shopping goods, Shopping consumers get information about and then Goods evaluate product features, warranty, performance, options, and other factors. The goods with the best combination of attributes is purchased. Sony electronics and Calvin Klein clothes are marketed as attribute-based shopping goods • For price-based shopping goods, consumers judge product attributes to be similar and look around for the least expensive item/store 22 www.studyMarketing.org

Slide 23: Specialty Goods • Those to which consumers are brand loyal. Specialty Goods • They are fully aware of these products and their attributes prior to making a purchase decision. • They are willing to make a significant purchase effort to acquire the brand desired and will pay a higher price than competitive products, if necessary. • For specialty goods, consumers will not make purchases if their brand is not available. Substitutes are not acceptable. 23 www.studyMarketing.org

Slide 24: Services Rented- goods Service Owned-goods Type of service Services Non-goods 24 www.studyMarketing.org

Slide 25: Services Involves the leasing of a good for a specified Rented- period of time. Examples include car, hotel room, goods Service apartment, and tuxedo rentals Involves an alteration or repair of a good owned by Owned-goods the consumer. Examples include repair services service (such as automobile, watch, and plumbing), lawn care, car wash, haircut, and dry cleaning Provides personal service on the pan of the seller; Non-goods it does not involve a goods. Examples include accounting, legal, and consulting services 25 www.studyMarketing.org

Slide 26: Characteristics of Services • The intangible nature of many services makes the consumer's choice more diffi-cult than with goods • The producer and his or her services are often inseparable • The perishability of services prevents storage and increases risks • Service quality may be variable 26 www.studyMarketing.org

Slide 27: Product Life Cycle Growth Maturity Decline Introduction 27 www.studyMarketing.org

Slide 28: Product Life Cycle Characteristics Introduction Growth Marketing objective Attract innovators and Expand distribution and opinion leader to new product line product Industry sales Increasing Rapidly increasing Competition None or small Some Industry profits Negative Increasing Customers Innovators Affluent mass market Product mix One or two basic Expanding line models Distribution Depends on product Rising number of outlets Pricing Depends on product Greater range of prices Promotion Informative Persuasive 28 www.studyMarketing.org

Slide 29: Product Life Cycle Characteristics Maturity Decline Marketing objective Maintain differential (a) cut back, advantage as long as (b) revive, possible (C) terminate Industry sales Stable Decreasing Competition Substantial Limited Industry profits Decreasing Decreasing Customers Mass market Laggards Product mix Full product line Best-sellers Distribution Greatest number of Decreasing number of outlets outlets Pricing Full line of prices Selected prices Promotion Competitive Informative 29 www.studyMarketing.org

Slide 30: New Product Planning Product Concept Business Idea Screening Testing Analysis Generation Product Commercial- Test Development ization Marketing 30 www.studyMarketing.org

Slide 31: New Product Planning • A continuous, systematic search for new Idea product opportunities Generation • It involves delineating sources of new ideas and methods for generating them • After the firm identifies potential Product products, it must screen them Screening • Many companies use a new-product screening checklist for preliminary evaluation 31 www.studyMarketing.org

Slide 32: Screening Checklist GENERAL CHARACTERISTICS OF NEW PRODUCTS Profit potential Existing competition Potential competition Size of market Level of investment Patentability Level of risk MARKETING CHARACTERISTICS OF NEW PRODUCTS Fit with marketing capabilities Effect on existing products (brands) Appeal to current consumer markets Potential length of product life cycle Existence of differential advantage Impact on image Resistance to seasonal factors PRODUCTION CHARACTERISTICS OF NEW PRODUCTS Fit with production capabilities Length of time to commercialization Ease of product manufacture Availability of labor and material resources Ability to produce at competitive prices 32 www.studyMarketing.org

Slide 33: New Product Planning • Concept testing presents the consumer with a proposed product and measures attitudes Concept and intentions at this early stage of Testing development • Concept testing is a quick and inexpensive way of measuring consumer enthusiasm • Business analysis for the remaining product concepts is much more detailed than product Business screening Analysis • Because the next step is expensive and time- consuming product development, critical use of business analysis is essential to eliminate marginal items 33 www.studyMarketing.org

Slide 34: Business Analysis Variables Factors Considerations Demand projections Price/sales relationship; short- and long-run sales potential; speed of sales growth; rate of repurchases; channel intensity Cost projections Total and per unit costs; use of existing facilities and resources; startup vs. continuing costs; estimates of future raw materials and other costs; econo-mies of scale; channel needs; break-even point Competition Short-run and long-run market shares of company and competitors; strengths and weaknesses of competitors; potential competitors; likely competitive strategies in response to new product by firm Required investment Product planning (engineering, patent search, product development, testing); promotion; production; distribution Profitability Time to recoup initial costs; short- and long-run total and per- unit profits; control over price; return on investment (ROI) 34 www.studyMarketing.org

Slide 35: New Product Planning • Product development converts a product idea into a physical form and identifies a basic Product marketing strategy Development • It involves product construction, packaging, branding, product positioning, and attitude and usage testing. • Test marketing involves placing a product for sale in one or more selected areas and Test observing its actual performance under the Marketing proposed marketing plan. • The purpose is to evaluate the product and pretest marketing efforts in a real setting prior to a full-scale introduction 35 www.studyMarketing.org

Slide 36: New Product Planning • After testing is completed, the firm is ready to introduce the product to its full target Commercial- market. This is commercialization and ization corresponds to the introductory stage of the product life cycle • Commercialization involves implementing a total marketing plan and full production 36 www.studyMarketing.org

Slide 37: Promotion Mix : Advertising, Publicity, Personal Selling and Sales Promotion 37 www.studyMarketing.org

Slide 38: Promotion Mix Publicity Advertising Target Market Sales Personal Promotion Selling 38 www.studyMarketing.org

Slide 39: Promotion Mix Factor Advertising Publicity Personal Selling Sales Promotion Audience Mass Mass Small (one-to-one) Varies Message Uniform Uniform Specific Varies Cost Low per viewer or None for media space High per customer Moderate per customer reader and time; can be moderate costs for press releases and publicity materials Sponsor Company No formal sponsor in Company Company that media are not paid Flexibility Low Low High Moderate Control over content High None High High and placement Credibility Moderate High Moderate Moderate Major goal To appeal to a mass To reach a mass To deal with individual To stimulate short-run audience at a audience with an consumers, to resolve sales, to increase reasonable cost, and independently reported questions, to close impulse purchases create awareness and message sales favorable attitudes Example Television ad for a Newspaper article Retail sales personnel A Kodak video camera Kodak video camera reporting on the unique explaining how a displayed at consumer features of a Kodak Kodak video camera photography shows video camera works 39 www.studyMarketing.org

Slide 40: Four Key Steps to Advertise Determine message content and devise an ad Specify the location of an ad (media placement) Choose how many Outline a promotion variations of a schedule basic message to utilize 40 www.studyMarketing.org

Slide 41: Things to Consider in Advertising Waste is the portion of an audience that is not in a firm's target market. Because Waste media appeal to mass audiences, waste is a significant factor in advertising. Reach refers to the number of viewers or Reach readers in the audience 41 www.studyMarketing.org

Slide 42: Things to Consider in Advertising Frequency is how often a medium can be used. It is greatest for newspapers, radio, and Frequency television, where ads may appear daily and advertising strategy may be easily changed Message permanence refers to the number Message of exposures one advertisement gener-ates permanence and how long it remains with the audience 42 www.studyMarketing.org

Slide 43: Things to Consider in Advertising Persuasive impact is the ability of a medium Persuasive to stimulate consumers. Television often has impact the highest persuasive impact because it is able to combine audio, video, color, animation, and other appeals. Clutter involves the number of ads that are Clutter contained in a single program, issue, etc. of a medium. Clutter is low when a limited number of ads is presented and high when many ads are presented. 43 www.studyMarketing.org

Slide 44: Publicity : Poor and Good Response Situation Poor Response Good Response Fire breaks out in Requests for information by Company spokesperson explains the cause of a company plant media are ignored. the fire and company precautions to avoid it and answers questions. New product Advertising is used without Pre-introduction news releases, product introduced publicity samples, and testimonials are used. News story about Requests for information by media Company spokesperson states that tests are product defects are ignored, blanket denials are being conducted on products, describes issued, hostility is exhibited toward procedure for handling defects, and answers reporter of story. questions. Competitor The advertising campaign is Extensive news releases, statistics, and introduces new stepped up. spokespeople are made available to media to product present company's competitive features. High profits Profits are rationalized and positive Profitability is explained, data (historical and reported effects on the economy are cited. current) are provided, uses of profits are detailed: research, community development. Overall view of There is an infrequent need for There is an ongoing need for publicity, strong publicity publicity; crisis fighting is used planning, and contingency plans for bad when bad reports are circulated. reports. 44 www.studyMarketing.org

Slide 45: Developing a Publicity Plan Outlining Setting types of objectives publicity Creating Selecting publicity media messages Timing publicity messages 45 www.studyMarketing.org

Slide 46: Publicity Type Publicity Type Example News publicity Macy's describes its decision to sell its stores in the Midwest. Business feature article Toyota explains its goals and objectives for the 2020. Service feature article A trade association offers 10 tips on how to reduce home heating costs. Finance release General Electric distributes quarterly financial data about the company. Product release Intel announces its new, fast-speed microprocessor Pictorial release Apple distributes photos showing all of its personal computer products and related software Background editorial Mc Kinsey presents a biography of its president and his rise through release the company. Emergency publicity The Red Cross makes a request for aid to tornado victims. 46 www.studyMarketing.org

Slide 47: Specific Personal Selling Objectives Type of Objective Illustrations Demand-Oriented Information To fully explain all good and service attributes To answer any questions To probe for any further questions Persuasion To clearly distinguish good or service attributes from those of competitors To maximize the number of sales as a per cent of presentations To convert undecided consumers into buyers To sell complementary items, e.g., film with a camera To placate dissatisfied customers Reminding To ensure delivery, installation, etc. To follow up after a good or service has been purchased To follow up when a repurchase is near To reassure previous customers when making a new purchase Image-Oriented Industry and company To maintain a good appearance by all personnel in contact with consumers To follow acceptable sales practices 47 www.studyMarketing.org

Slide 48: Personal Selling Process Customer Prospecting Approach Wants (blind, lead) Answering Sales Questions Presentation (questions and objections) Follow up Close (satisfaction, referrals, repurchase) 48 www.studyMarketing.org

Slide 49: Types of Sales Promotion Type Characteristics Illustration Coupons Manufacturers or retailers advertise P&G mails consumers a 25-cents- special discounts for customers who off coupon for Sure deodorant, redeem coupons. which can be redeemed at any supermarket. Refund or A consumer submits proof-of- First Alert home fire alarms rebate purchase (usually to the provides $5 rebates to consumers manufacturer) and receives an extra submitting proof of purchase. discount. Samples Free merchandise or services are When Sunlight dishwashing liquid given consumers, generally for new was introduced, free samples were items. mailed to consumers. Contests or Consumers compete for prizes by Publishers Clearinghouse sponsors sweepstakes answering questions (contests) or annual sweepstakes and awards filling out forms for random drawings automobiles, houses, and other of prices (sweepstakes). prices. 49 www.studyMarketing.org

Slide 50: Types of Sales Promotion Type Characteristics Illustration Bonus or Consumers receive discounts Some stores run I-cent sales, multipacks for purchasing in quantity whereby the consumer buys one item and gets a second one for a penny. Point-of- In-store displays remind Chewing gum sales in purchase customers and generate supermarkets are high because displays impulse purchases. displays arc placed at checkout counters. Special Manufacturers or retailers Virtually every major league events sponsor celebrity appearances, baseball team has an annual \"Old fashion shows, and other Timers' Day,\" which attracts large activities. crowds. Gifts Consumers are given gifts for Savings banks offer a range of making a purchase or opening gifts for consumers opening new a new account. accounts or expanding existing ones. 50 www.studyMarketing.org

Slide 51: Sales Promotion Advantages • It helps attract customer traffic and maintain brand or store loyalty • Quick results can be achieved • Some forms of sales promotion (calendars, t-shirts. Pens, etc) provide value to the consumer and are retained by them; and these forms can provide a reminder function • Impulse purchases can be increased through in-store displays 51 www.studyMarketing.org

Slide 52: Sales Promotion Disadvantages • The image of the firm may be lessened if it continuously runs promotions. Consumers may view discounts as representing a decline in product quality and believe the firm could not sell its offerings without them. • When coupons, rebates, or other special deals are used frequently, consumers may not make purchases if the items are sold at regular prices. Instead, they will stock up each time there is a promotion. 52 www.studyMarketing.org

Slide 53: Sales Promotion Disadvantages • Sometimes sales promotions shift the focus away from the product onto secondary factors. Consumers may be attracted by calendars, coupons, or sweepstakes instead of by product quality, functions, and durability. In the short run this generates consumer enthusiasm. In the long run this may have adverse effects on a brand's image and on sales, because a product- related differential advantage has not been developed. 53 www.studyMarketing.org

Slide 54: Distribution Planning and Pricing Strategy 54 www.studyMarketing.org

Slide 55: Distribution Planning • Distribution planning is systematic decision making regarding the physical movement and transfer of ownership of a product from producer to consumer. • It includes transportation, storage, and customer transactions. • Distribution functions are carried out through a channel of distribution, which is comprised of all the organizations or people involved in the process. • These organizations or people are known as channel members or middlemen. 55 www.studyMarketing.org

Slide 56: Intensity of Channel Coverage Characteristics Exclusive Selective Intensive Distribution Distribution Distribution Objectives Prestige image, Moderate market Widespread channel control and coverage, solid market coverage, loyalty, price image, some channel stability and high channel control and acceptance, sales profit margins loyalty, good sales volume and profits and profits Channel Few in number, Moderate in number, Many in number, members well-established well-established, all types reputable stores better stores of outlets Customers Few in number, Moderate in number, Many in number, trend setters, brand conscious, convenience- willing to travel to somewhat willing to oriented store, brand loyal travel to store 56 www.studyMarketing.org

Slide 57: Intensity of Channel Coverage Characteristics Exclusive Selective Intensive Distribution Distribution Distribution Marketing Personal selling, Promotional mix, Mass Emphasis pleasant pleasant shopping advertising, shopping conditions, good nearby location, conditions, good service items in stock service Major Limited sales May be difficult to Limited channel Disadvantages potential carve out a niche control Examples Automobiles, Furniture, Groceries, designer clothes, clothing, watches household caviar products, magazines 57 www.studyMarketing.org

Slide 58: Methods of Channel Cooperation Factor Manufacturer Action Channel Member Action New-product Thorough testing, adequate Good shelf location and introduction promotional space, enthusiasm for support product, assistance in test marketing Delivery Prompt filling of orders, adherence to Proper time allowed for scheduled dates delivery, shipments immediately checked for accuracy Promotion Sales force training, sales force Attractive in-store displays, incentives, development of national knowledgeable advertising campaign, cooperative salespeople, participation in programs cooperative programs Product Product guarantees Proper installation and quality servicing of products 58 www.studyMarketing.org

Slide 59: Pushing and Pulling Strategy Pushing Strategy Pulling Strategy Manufacturer Manufacturer Channel Channel members members Consumers Consumers 59 www.studyMarketing.org

Slide 60: Price Planning Represents the value of a good or service for both the A Price seller and the buyer Systematic decision making Price by an organization regarding Planning all aspects of pricing 60 www.studyMarketing.org

Slide 61: Factors Affecting Pricing Decisions Consumers Competitors Cost Channel Government Members Total Effects on Price Decisions 61 www.studyMarketing.org

Slide 62: Consumers and Price Decisions • The relationship between price and consumer purchases and perceptions is Consumers explained by two economic principles — the law of demand and price elasticity of demand • The law of demand states that consumers usually purchase more units at a low price than at a high price • The price elasticity of demand defines the sensitivity of buyers to price changes in terms of the quantities they will purchase 62 www.studyMarketing.org

Slide 63: Consumers and Price Decisions • Elastic demand occurs if relatively small changes in Elastic price result in large changes in quantity demanded Demand • Numerically, price elasticity is greater than 1 • With elastic demand, total revenue goes up when prices are decreased and goes down when prices rise • Inelastic demand takes place if price changes have In-elastic little impact on quantity demanded Demand • Price elasticity is less than 1 • With inelastic demand, total revenue goes up when prices are raised and goes down when prices decline 63 www.studyMarketing.org

Slide 64: Consumers and Price Decisions • Unitary demand exists if changes in price are Unitary exactly offset by changes in quantity demanded, Demand so that total sales revenue remains constant. • Price elasticity is 1 64 www.studyMarketing.org

Slide 65: Competitors and Price Decisions • Another element contributing to the degree of control a firm has over prices Competitors is the competitive environment within which it operates 65 www.studyMarketing.org

Slide 66: Competitors and Price Decisions • Market- Characterized by a high level of com- controlled petition, similar goods and services, and little price control over price by individual companies environment • Company- Characterized by moderate competi-tion, controlled well-differentiated goods and services, and priced strong control over price by individual firms environment 66 www.studyMarketing.org

Slide 67: Competitors and Price Decisions • Government- Characterized by prices set by the controlled government. Examples are public utilities, price buses, taxis, and state universities environment 67 www.studyMarketing.org

Slide 68: Channel Members and Price Decisions • A wholesaler or retailer can gain stronger Channel control over price by stressing its importance as Members a customer to the manufacturer, refusing to carry unprofitable product, stocking competitive items, and developing strong dealer brands so that consumers are loyal to the seller and not the manufacturer • Sometimes retailers engage in selling against the brand, whereby they stock merchandise, place high prices on it, and then sell other brands for lower prices. This is often done to increase the sales of their own brands 68 www.studyMarketing.org

Slide 69: Channel Members and Price Decisions • To ensure channel member cooperation with Channel price decisions, the manufacturer needs to Members consider four factors: channel member profit margins, price guarantees, special deals, and the impact of price increases 69 www.studyMarketing.org

Slide 70: Government and Price Decisions Price fixing regulations Prohibitions against price discrimination among Government channel members Unfair sales acts : predatory pricing 70 www.studyMarketing.org

Slide 71: Cost and Price Decisions Cost of raw materials and Cost supplies Labor cost Pricing Decisions Advertising Cost Distribution Cost 71 www.studyMarketing.org

Slide 72: Price Strategy Cost-based Price Strategy Price Demand-based Strategy Price Strategy Competition- based Price Strategy 72 www.studyMarketing.org

Slide 73: Price Strategy With a cost-based price strategy, the Cost-based Price marketer sets prices by computing Strategy merchandise, service, and overhead costs, and then adding the desired profit to these figures The marketer sets prices after Demand-based researching con-sumer desires and Price Strategy ascertaining the range of prices acceptable to the target market 73 www.studyMarketing.org

Slide 74: Price Strategy • The marketer sets prices in Competition- accordance with competitors based Price Strategy • Prices may be below the market, at the market, or above the mar-ket, depending on customer loyalty, services provided, image, real or perceived differences between brands or stores, and the competitive environment 74 www.studyMarketing.org

Slide 75: Recommended Further Readings 1. Joel Evans and Barry Berman, Marketing, Prentice Hall 2. Phillip Kotler, Marketing Management, Prentice Hall 75 www.studyMarketing.org

Slide 76: End of Material 76 www.studyMarketing.org