marketing – what do people want “give people what they want” sellers steps to place product...
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Marketing – What do People Want“Give People What They
Want” Sellers steps to place
product or service in hands of potential customers
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Marketing
Marketing is...
‘The management process responsible for identifying,
anticipating and satisfying customer requirements
profitably’
Chartered Institute of Marketing
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Market segmentation
Splitting up the market into groups of people with similar needs and characteristics
Products and marketing activities can be tailored to the needs the segments
Markets can be segmented by age, gender, lifestyle, income and geography
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Market research
Market research is the process of collecting data about
customers and competitors.
There are two types of market research: Primary research – gathering first hand data e.g.
through questionnaires and focus groups Secondary research – gathering existing data e.g.
through trade journals and government statistics
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Market Types Market Types
Mass Market – paper towels, cell phones Niche Market – cosmetics for sensitive skin, dog-walking
service
Market Research Qualitative
Focus groups, 1 on 1 interviews, behavioral observation
Quantitative – Large samples Use statistics to draw conclusions
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The Marketing Mix
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The Marketing Mix
Strategies & Activities Used by companies to
sell goods, services
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The Marketing Mix The tools available to a business to gain the
reaction it is seeking from its target market in relation to its marketing objectives
7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment
Traditional 4Ps extended to encompass growth of service industry
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Price
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Price Pricing Strategy Importance of:
knowing the market elasticity keeping an eye
on rivals
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Price
The price of a product will depend on: The cost to make it The amount of profit desired The price competitors charge The objectives of the business The price customers are willing to pay
Is there a high demand? Is demand sensitive to changes in price?
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Pricing strategies and tacticsSkimming Launching with a high price when there is little
competition, then reducing the price later. Often used with technology.
Penetration A low price is charged initially to penetrate the market and build brand loyalty. The price is then increased e.g. introductory offers on magazines.
Competitive A similar price is charged to that of competitors’ products.
Loss leader Products may be sold at a price lower than the cost to produce it. Often used by supermarkets to encourage people into the store where it is hoped they will buy other products.
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Pricing strategies and tacticsPsychological A price is set which customers perceive as lower
than it is e.g. $39.99 instead of $40.
Differential Different prices are charged for the same product e.g. bus fares for children are cheaper than adult prices.
Cost plus pricing An additional ‘mark-up’ is added to the cost of producing a good or service.
Strategic pricing Price is set to position an exclusive product or brand to make it more desirable for consumers, generate demand or demonstrate value
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Product
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Product
‘Product’ refers to the functions and features of a good or service
Should satisfy the needs of the customer May have a Unique Selling Proposition (USP) ‘Product’ also includes a range of factors such as packaging,
quality, warranties, after-sales service and branding Products and brands may suggest certain images e.g. sporty,
sophisticated, value
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Product Methods used to
improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. Extension strategies Specialized versions New editions Improvements – real or
otherwise! Changed packaging Technology, etc.
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1 2 -8
T h e P r o d u c t L ife C y c le
S a le s C u r v e
Dol
lars
T im e
G ro w th M a tu r ity D e c lin e
P r o f it C u r v e
P ro d u c t
D e v e lo p m en t
In tro d u c tio n
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Product lifecycle
The product lifecycle looks at the sales of a product
over time
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Stages of the product lifecycleDevelopment – high costs but no sales
Launch – high expenditure on promotion and
product development, low sales
Growth – sales increase and product should break
even
Maturity – sales stabilize, less expenditure on
promotion needed, revenue & profit should be high
Decline – sales decline, extension strategies can be
adopted or the product withdrawn
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Extension strategiesExtension strategies should maintain or increase
sales.
They include: Modifying the product Reducing the price Adding a feature Promoting to a
different market
sector
Extension Extension strategiesstrategies
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Promotion
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Promotion Strategies
to make the consumer aware of the existence of a product
or service NOT just advertising
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Promotion
The aims of promotion are to: Raise awareness Encourage sales Create or change a brand image Maintain or increase market share
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Types of promotion
Above-the-line promotion
This uses mass media advertising over which a firm
has no direct control e.g. television, radio and
newspapers
Below-the-line promotion
This uses promotional media which the firm can
control e.g. direct mail, sales promotions, sponsorship
and social media
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Promotional activities
Advertising e.g. TV, billboards and internet. Sales promotions e.g. loyalty cards, BOGOF,
discounts & free gifts Sponsorship – a business pays to be associated with
another firm, event or cause Direct mailing – promotional material is sent to
potential customers by post/email Public relations – building the relationship between
the firm and the public by enhancing its reputation
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Promotional mix
Most businesses use a combination of different
promotional activities.
The chosen promotional mix will depend on: Cost Target market Product Competitors
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AIDA
Promotional campaigns often take into account the
AIDA model: Awareness - raising awareness of a product
Interest – exciting interest in the product
Desire – creating desire for the product
Action – encouraging a purchase
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Place
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Place The means by which products and services
get from producer to consumer and where they can be accessed by the consumer The more places to buy the product and the easier
it is made to buy it, the better for the business (and the consumer?)
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Place
Products should be conveniently available for customers to buy
‘Places’ include: Stores Mail order Telesales Internet
The use of e-commerce (promoting and selling on the internet) has
grown massively over the last few years
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Channels of distributionManufacturer
Wholesaler
Retailer
Consumer
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People
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People People represent the business
The image they present can be important First contact often human – what is the lasting image they
provide to the customer? Extent of training and knowledge
of the product/service concerned Mission statement – how relevant? Do staff represent the desired culture
of the business?
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Process
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Process How do people consume services? What processes do they have to go through to
acquire the services? Where do they find the availability
of the service? Contact Reminders Registration Subscription Form filling Degree of technology
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Physical Environment
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Physical Environment The ambience, mood or physical presentation of the
environment Smart/shabby? Trendy/retro/modern/old fashioned? Light/dark/bright/subdued? Romantic/chic/loud? Clean/dirty/unkempt/neat? Music? Smell?
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The Marketing Mix Blend of the mix depends upon: Marketing objectives Type of product Target market Market structure Rivals’ behaviour Global issues – culture/religion, etc. Marketing position Product portfolio
Product lifecycle Boston Matrix