chapter 2 - marketing mix key concept in the modern marketing considered to be core of marketing it...
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Chapter 2 - MARKETING MIX Key concept in the modern marketing Considered to be core of marketing It is the set of tools that the firm uses to
pursue its marketing objectives in the target market
Decisions must be made for both the distribution channels and the final
consumers
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Marketing Lessons
Product
Price
Place
Promotion
Consumer
Cost
Convenience
Communication
OLD New
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Winning companies are those that can meet customer needs economically and conveniently and with effective communication
Services Marketing Mix – 7P’sProduct, Price, Place, Promotion, People, Physical evidence, Process
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PRODUCTA product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need
PRODUCT PERSONALITY
THE CORE
THE ASSOCIATED FEATURES
THE BRAND NAME & LOGO
THE PACKAGE AND LABEL
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PRODUCT LEVELS
Core benefit, basic product, expected product, Augmented product and Potential product.
PRODUCT CATEGORY Durability, tangibility and use Product item, Product Line, Product
mix Banking product
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PRODUCT PLANNING
The process of product planning consists of determining the strategies in respect of various elements. Product Line, Product Mix, Branding, Packaging and New product development.
PRODUCT LIFE CYCLEIntroduction, Growth, Maturity, DeclineThe product Life cycle operates at three levels product level, product sub category, brand level.
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WEAKNESS OF PLC CONCEPTUndefined conceptNo uniform shapeUnpredictable turning pointsUnclear implications
PRODUCT STRATEGIESStrategies based on Product MixStrategies based on Product Life Cycle
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PRODUCT MODIFICATIONQuality ImprovementFeature ImprovementStyle Improvement
PRODUCT ELIMINATIONGROWTH STRATEGIES
IntensiveIntegratedDiversification
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NEW PRODUCT DEVELOPMENTIdea ScreeningConcept TestingProduct DevelopmentTest MarketingCommercial Launch
DIVERSIFICATIONConcentric Diversification – technologically related but the target customers are entirely
differentHorizontal Diversification - technologically
unrelated but the target customers are sameConglomerate Diversification – no
relationship with the existing product
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BRANDINGLine ExtensionBrand ExtensionMulti brandsNew Brands
PACKAGING Primary PackageSecondary PackageShipping Package
LABELLINGIdentify the product or brandDescribing informationPromoting the product through 'attractive graphics'
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PRICINGPrice is the sum value of all the values that consumers exchange for the benefits or having or using the product or service
Different forms - Goods bought, hire charges, tution fees
Dynamic Pricing - Varying pricesFlexibility
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OBJECTIVE OF PRICINGProfitSurvivalMarket ShareCash FlowStatus QuoProduct QualityCommunicating ImageShort term/Long term
FACTORS INFLUENCING PRICINGThe Customer's Demand ScheduleThe Cost Function and Competitors Prices
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PRICING METHODSMark up PricingVariable costs and contribution for fixed costs
Absorption cost Pricingmargin for profit
Target Return PricingReturn on the investment
Marginal cost PricingDirect variable costs are fully realizedOnly a portion of fixed costs may realized
Perceived Value PricingBuyer’s perception of value
Value PricingProduct with high value at a fairly low price
Going Rate PricingBased on competitor’s prices
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PRICING METHODS (Contd..)Auction Type Pricing
English AuctionsOne seller many buyer
Dutch Auctions Sealed Bid
Auctions Group Pricing.
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Pricing StrategiesGeographical pricingPrice discount and allowancesPsychological pricingPromotional pricing
Loss-leader pricingLoss is covered by sale of other items
Special event pricingCash rebatesLow-interest financingLonger payment termsWarranties and service contractsPsychological discounting
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Pricing Strategies (Contd.) Discriminating pricing
First degreedifferent prices to each customer depending upon their intensity of demand
Second degreeLower prices for buyers of a larger volume
Third degreeCustomer groups – student,
senior citizen
Product formImage pricingChannelLocationTime
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Pricing Strategies (Contd.)
Product-mix pricingProduct line pricing –developing
product line
Captive-product pricing – main product at lower price, ancillary product at higher price
Two-part pricing – split into fixed and variable component
By-product pricing – by-products obtained in production of other products
Product-bundling pricing Market skimming pricing Market-penetration pricing
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DistributionDistribution channel
Marketing channels are sets of independent
organizations involved in the process of making a
product or service available for use of consumption.
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Functions of distribution channelsMarket informationPromotionContactMatchingNegotiationProduct informationPhysical distributionFinancing
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Channels typesChannel 1, Channel 2, Channel 3, Channel 4, Factor influencing channel section
Product characteristicsPerishable productsConsumer durablesIndustrial products
Market characteristicsCustomer characteristicsCompany resourcesCompetitionProduct lines
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Channels for banking productsIntangibilityInseparabilityVariabilityPerishabilityClient relationship
BranchesOther channels
Tele-bankingATMsComputerizationPlastic CardsVirtual branches and automated video banking
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Intermediaries in banking services
DSAAutomobile DealersMerchant establishments
Physical distributionTransportationWarehousingInventory
Tasks of physical distributionForecastingOrder processingInventory management
StorageProtective
packagingTransportation
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PromotionRole of promotion
PersuasionInformRemindingReinforcing
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Promotion mix
AdvertisingPersonal
selling
Sales Promotion
Public Relations
Direct Marketing
Blended Mix of Promotion Tools
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Promotion mix strategies• Push strategy -Retailer
• Pull strategy - Customer
Factors influencing promotion mix• Types of product/market• Buyer’s readiness stage• PLC stage
Promotion mix integration
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Marketing Information System (MIS)Features of MIS
Master PlanCoordinationFuture OrientationComputerized EnvironmentAnalyse Quantitative InformationRegular flow of Information
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Functions of MISCollecting and assembling dataProcessing of dataAnalysis of dataStorage of dataDiscrimination of information
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Need of MIS
Complex marketing activityKnowledge /information explosionCommunication gapPrompt decisionNon-price competition
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Kinds of information needed• Information about market forces• Information about the bank’s market behaviour• Internal information
Components of MIS• Internal marketing information• Marketing intelligence system• Marketing research system
Advantages of MIS