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BSBMKG501BIDENTIFY AND EVALUATE MARKETING OPPORTUNITIES PRESENTATION 2

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PRESENTATION OUTLINEAt the end of this presentation you will know about:

• The Marketing Mix

• Product

The Product Life Cycle

• Price

Pricing: Internal Factors

Pricing: Pricing Approaches

Pricing: Price Adjustment Strategies

• Place

Place: Marketing Channels

• Promotion

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THE MARKETING MIX

Target Market/Int

ended Position

Product

Price

Place

Promotion

Process

Physical Evidence

People

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PRODUCT

• A product is anything that can be offered to a market for attention,

acquisition, use or consumption that might satisfy a want or need

• There are many types of products – goods, services, events,

ideas/causes, people, political candidates and parties, locations

and so on

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PRODUCT

Product Attributes

• Developing a product or service involves defining the benefits that

will be offered to the marketplace. These benefits are

communicated and delivered by product attributes such as

quality, features and design.

• Product quality: the ability of a product to perform its functions

• Product features: competitive tools used by marketers to

differentiate a company’s product from competitors’ products.

• Product design: good design is not just about making a product

look stylish, it is also about creating a product that is easy, safe,

inexpensive to use and service, and simple and economical to

produce and distribute

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PRODUCT

• Products are further categorised by the level of attributes they

contain

Augmented

Actual/Secondary

Core

• Delivery and Credit• Installation• Warranty• After Sales Service• Brand Name• Features and Styling• Quality• Packaging

• Core Benefit or Service

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THE PRODUCT LIFE CYCLEThe product life cycle is the

course of a product’s sales

and profits during its lifetime.

It involves five distinct

stages:

① Product

Development

② Introduction

③ Growth

④ Maturity

⑤ Decline

The exact shape and length

of each stage varies from

product to product, and

market to market.

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THE PRODUCT LIFE CYCLE① Product Development

• A strategy for promoting company growth by offering modified or new

products to current market segments is developed

② Introduction

• New product is first distributed and made available for purchase

③ Growth

• If successful, sales will start climbing quickly. Growth amongst competitors,

distribution, profits etc. begin to grow

④ Maturity

• Sales growth slows or levels off

⑤ Decline

• Sales decline. Company must identify declining product and decide whether it

should be maintained, harvested or dropped

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PRICE

• The value of the exchange charged for a product or service

• The only element in the marketing mix that generates revenue

(the rest are costs)

Common mistakes made by companies in setting prices include:

• Pricing is cost-oriented

• Prices are not revised to reflect market changes

• Pricing does not take the rest of the marketing mix into account

• Prices are not varied enough for different product items and

market segments

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PRICE

A company’s pricing decisions are affected by a number of factors:

• Internal (company) factors:

• Marketing objectives

• Marketing-mix strategy

• Costs

• Organisational considerations

• External (environmental) factors:

• Market and demand

• Competitors’ prices and offers

• Other factors such as economic conditions, resellers,

government

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PRICING: INTERNAL FACTORS

Marketing Objectives

• Price is often largely determined by the target market and

positioning for the product. The clearer a firm is about its

objectives, the easier it will be to set price

Marketing-Mix Strategy

• Pricing decisions must be coordinated with product design,

distribution and promotion decisions to form a consistent and

effective marketing program

Costs

• The company must cover all of its costs for producing, distributing

and selling the product, and also deliver a fair rate of return for its

effort and risk

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PRICING: PRICING APPROACHESCompanies set prices by selecting a general pricing approach that includes

one or more of the following four sets of factors:

• Cost-based pricing

• Adding a standard ‘mark-up’ to the cost of producing the product

• Value-based pricing

• Based on the buyer’s perception of value

• Competition Based pricing

• Also called ‘going-rate’ pricing

• Follows competitors’ pricing, not company costs or market demand

• Relationship pricing

• Incorporates shared risk and benefits between company and

suppliers

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PRICE: PRICE ADJUSTMENT STRATEGIES

Companies may also use price adjustment strategies to account for

differences in consumer segments and situations”

• Discount pricing: Company lowers the regular price of its products

• Segment pricing: Company sets different prices for different

customers, product forms, places or times

• Psychological pricing: Company adjusts price to communicate

more effectively a product’s intended position

• Promotional pricing: Company decides on loss leader pricing

(charging less), special-event pricing and psychological discounting

• Geographical pricing: Company decides how to price to distant

customers, choosing from alternatives like uniform delivered pricing,

and zone pricing

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PLACE

• Place is the system of efficiently and effectively making and

getting products and services to end-users

• Consists of Marketing Channels

• Members of the marketing channel move goods from producers

and suppliers to consumers

• Members may include:

• Retailers

• Manufacturers

• Warehouses

• Transport companies

• Docks and wharves

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PLACE

• Distribution and logistics can add up to 30-40% to a product’s cost

• A well planned marketing logistics program can be a key tool in

competitive marketing

Kotler et al describes marketing channels as:

“A set of interdependent organisations involved in the process of

making a product or service available for use or consumption by

the consumer or industrial user”

• Members of the marketing channel move goods from producers and

suppliers to consumers

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PLACE: MARKETING CHANNELS

Channel Structures

• Each layer of intermediaries that works to bring the product and

its ownership closer to the final buyer is a channel level

• The number of channel levels used indicates the length of a

channel

• A direct marketing channel has no intermediary levels. It consists

of a manufacturer selling directly to consumers.

• For the producer, greater numbers of levels generally means less

control, greater complexity and more costs

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PLACE: MARKETING CHANNELS

• Examples of various intermediary levels:

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PROMOTION• The process of integrating and coordinating available

communication channels to deliver a clear, consistent and

compelling message about the organisation, and it's products or

services

• The objectives of the communication may vary: inform, persuade,

remind, reinforce attitudes or perceptions

• In order to develop a compelling message, the sensible marketer:

① Identifies the target audience

② Determined the response they seek

③ Selects a message

④ Selects the appropriate media

⑤ Collects meaningful feedback

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PROMOTION

① Identifying the Target Audience

• Might be current users, potential buyers, decision makers, general

public etc.

② Determining Response Sought

• There are other stages that come before the ultimate purchase in

the decision making process that the marketer will attempt to

influence

③ Selecting a Message

• The marketing must determine what to say, how to say it logically

and how to say it symbolically

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PROMOTION

④ Selecting Media

There are 5 common communication channels used in modern

consumer marketing:

1. Advertising

2. Public Relations

3. Personal Selling

4. Sales Promotions

5. Direct Marketing

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PROMOTION

⑤ Reviewing Media Performance

• Once the message has been sent, the marketing must obtain

meaningful feedback to determine the success of the

communication

• Research may include:

• Does the consumer remember the message

• How many times they saw it

• What points do they recall

• How they responded to it

• Their attitude towards the company and/or product

• Did it result in a behaviour change

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PRESENTATION SUMMARYNow that you have completed this presentation you will know about:

• The Marketing Mix

• Product

The Product Life Cycle

• Price

Pricing: Internal Factors

Pricing: Pricing Approaches

Pricing: Price Adjustment Strategies

• Place

Place: Marketing Channels

• Promotion