Marketing

Indicator 1.02 – Employ marketing information to develop a

marketing plan

THE MARKETING MIXIncludes four basic

strategies called the 4 P’s or elements of marketing. A combination of decisions a business makes in order to best reach its target market.

It is called a Marketing Mix because the 4 P’s can each be adjusted to better meet the needs of the customers and company

ProductPlacePrice Promotion

The 4 P’sProduct - Businesses must decide which products to offer customers.

Level of quality, features, branding, packaging, service, and warranty are items to decide and develop for each product.

PRODUCTMarketers as themselves questions such as:Should we offer one product-or more than one?Is the product a good, service, or idea?Does the product have special features?Does the product have multiple uses?What resources are necessary to research and develop the

product?What level of quality should be produced or provided?Which brands should be used?How should the product be packaged?How might the product affect the firm’s image?How might customers view this product in relation to others?Should we offer a warranty, maintenance contract, or other

support services?

The 4 P’sPlace - Having the product available at the right time and location.

Also known as channel management/ distribution.

For example, store locations, website, and catalogs are the standard for most retailers today. Decisions of direct distribution or indirect distribution (intermediaries/middlemen) must be made.

PLACEConsider the following:

Which firms to buy the product from?When to buy the product?How much of the product to order?Where to make the product available?How to process customer orders?Which firms to involve in the process?How to answer customer questions?How to coordinate all of the steps involved?

The 4 P’sPrice - The amount a business charges customers for a product.

What competition is charging, determining seasonal discounts and allowances, and credit terms.

PRICEDetermine pricing objectives:

Getting their product into more customers’ hands.

Helping customers view their firm as distinct from competitors

Bringing in the amount of income they need or want.

Raising the product’s value in the customer’s eyes

Matching the product’s value with what customers expect to receive

The 4 P’sPromotion - Informing and

reminding customers of the products available to them and persuading them to purchase. Promotional Mix includes advertising, personal selling, sales promotion, and publicity.

These decisions are based on the budget a business sets for the promotional mix.

PROMOTIONConsider the following:

Which messages to send?Which media to use?When they want messages delivered?How often they want messages delivered?How to coordinate communication efforts?How to evaluate results?

The ultimate goal of promotion is to generate a positive response from customers.

IMPORTANCE OF THE 4 P’S Product is important to

obtain or develop the best product mix within your market and your target market.

Place is important because it is the avenues you come into contact with your customers. This is the element that has direct impact on loyalty and repeat customers.

Price is important because it establishes your profit and set the quality level of your products/services.

Promotion is important because it communicates with your customers so they know about your product mix.

How should the product be packaged?ProductShould we offer credit and layaway?PricingShould we allow our product to be

sold by a wholesaler?PlaceHow often should we advertise?Promotion

DO YOU KNOW??

How many sales people should we hire?PromotionShould we offer guarantees or warranties?ProductWhich type of transportation should we use to

move the product?PlaceWhat should be offered for sale?ProductHow often should we put the product on sale?PriceWhich celebrity could we use to entice customers

into the store?Promotion

RELATIONSHIP OF GOALS, TACTICS, & STRATEGIES TO THE MARKETING

MIXGoals/Objectives: Specific statements that

clearly communicate what the business expects to achieve.Established to fulfill the mission statementMust be single-minded, realistic, specific,

measurable, consistent with each other and with overall company goals, and must include a time frame for completion

Strategies: Specific statements indicating how the business expects to accomplish its objectives taking the demands of the target market(s) into account.Identify target marketsIdentify appropriate marketing mix choicesUtilize information obtained during SWOT analysis

RELATIONSHIP OF GOALS, TACTICS, & STRATEGIES TO THE MARKETING MIXTactics:

Tangible, measurable tasks that have to be completed to accomplish the strategic objectives.

Tactics are the day-to-day activities that step the company toward its goals.

Tactics are used to reach the strategies that then meet the goals.

Coming up w/ Marketing Strategy

You own a RESTAURANTGoal: A family-style restaurant wants to increase salesStrategy: Add a kids’ menu in order to increase

sales to young parents in the areaTactics : To introduce the new kids’ menu, the family style restaurant might decide to use the following tactics:1. Introduce kid-tested meals

A)spaghetti & meatballs C) hot dog w/chipsB) macaroni & cheese D) hamburger w/fries

2. Offer a free ice cream cone to each child

What is a Market?

Market: The group of all potential customers who have similar needs and wants and have the ability to buy the product. Businesses must understand who the potential consumers are in order to effectively meet their needs and wants.

WHAT IS A TARGET MARKET?Identified segments of

the market that a business wants to have as their customers. For example, teenagers, mothers-to-be, single mothers, American Family, men .vs. women, or college freshman. Each example has wants and needs that can be targeted and utilized to develop effective strategies to reach existing and/or potential customers.

IMPORTANCE OF TARGET MARKETS

A target market represents the people most likely to buy what you sell. These people have something in common that solidifies their desire for your product or service. And that something distinguishes them from the market at large.

MASS MARKETING

A single marketing plan used to reach all consumers.

Ex. Chewing gum & light bulbs

MASS MARKETINGAdvantages

Don’t have to pay for the production of similar products

Can price and distribute one type of product more easily than many

Can send one promotional message to everyone

Easier to manage, cost effective

Predictable response rates

Easy to set up.

Disadvantages:Diversity of the

audienceUnable to track

return, low response rates

NonpersonalBeliefs that everyone

is the sameLow profit marginsHigh competition

SEGMENTATIONMarket

Segmentation is the process of dividing a larger market into smaller parts.

Market segment is a subgroup of a larger market that share one or more characteristics.

MARKET SEGMENTATIONAdvantages:

Providing the products customers want

Effective communication

Higher response rate,

Repeat and loyal customers

Personal

Disadvantages: More expensive,

more difficult to produce

Expensive to set up

Requires more marketing research

4 TYPES OF MARKET SEGMENTATION

DemographicPsychographic

GeographicBehavioral

DEMOGRAPHIC SEGMENTATION

Gender: indicates purchase preferences

Origin or heritage: race, ethnicity, nationality

Religion Social or economic

status: education level, occupation, income

Life stage: age, generation, marital status, family life cycle, family size.

GEOGRAPHIC SEGMENTATIONMarkets divided by

where the customer lives.

It is valuable information because businesses can tailor their product mix based on location. Characteristics are nations, states, regions, counties, cities, or neighborhoods.

PSYCHOGRAPHIC SEGMENTATION

Defined: Markets divided by social and psychological characteristics. (value/morals, attitude Lifestyles, and interests)

Characteristics reflect consumer buying behaviors. The characteristics are Interests, Habits, Activities, Lifestyles, Opinions, & Hobbies. These reflect who your customers are. Businesses that use Marketing principles to guide their decision making must evaluate and reevaluate their customer’s wants and needs continuously to stay ahead in the game.

BEHAVORIAL SEGMENTATION

Dividing the market into groups based on what they are looking for in a product and why they buy the product

Types of behavioral segmentation:

Product Benefits

UsageLoyaltyOccasions

ACTIVITYPick a person and decide the following about that

person: Demographic – what age, gender, race, etcGeographic – where does she live: east, west, suburbs, urban, etcPsychographic – what does this person like to do? Run, dance,

fun, etcBehavioral – specifics; runs three miles, works out daily, looking

for a shoe that’s stylish, etc.Type a description of person on computer.

Go to Nikeid.nike.com and customink.com and create a shoe and shirt that would appeal to that specific segmentation.

Cut out pictures and description and paste to separate sheet of paper; label “MARKETING SEGMENTATION”