Principles of Marketing Lesson 02
Marketing Environment A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. (Philip Kotler -12 th Edition)
Marketing Environmental Framework Marketing environment has 3 basic layers (levels) as shown below Forces Actors Macro Environment PESTEL P olitical Micro Environment factors Competitors Publics L egal Internal Customers Environment E conomic Suppliers Intermediaries E nvironmental S ocio-cultural T echnological To be successful, a marketer should monitor changes happening in the entire marketing environment
Marketing Mix Marketing Mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. (Philip Kotler – 12th edition) Product Marketers need to offer the right product at right price in right Marketing Promotion Price Mix/Tools channels (place) with right communication (promotion) Place
Extended Marketing Mix Applicable for Services Product Physical Price Evidence Marketing mix Process Place People Promotion
EXTENDED MARKETING MIX ELEMENTS
Seven P’s might be better described as the seven C’s: Producers View (7P’s) Customers View (7C’s) • Product • Customer Value • Price • Cost • Place • Convenience • Promotion • Communication • People • Consideration • Process • Co-ordination • Physical Evidence • Confirmation
DEFINITION OF A PRODUCT Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. (Philip Kotler – 12 th Edition)
Product - Components – Variety – Design – Quality – Features – Brand name – Packaging
Levels of Product Core Benefit - the fundamental need or want that consumers satisfy by consuming the product or service Generic Product - a version of the product containing only those attributes or characteristics absolutely necessary for it to function Expected Product - the set of attributes or characteristics that buyers normally expect and agree to when they purchase a product Potential Augmented Product Augmented inclusion of additional features, benefits, attributes or Expected related services that serve to differentiate the product from Generic its competitors Potential Product Core all the augmentations and transformations a product might undergo in the future
Products Consumer Products • Convenience products • Shopping products • Specialty products • Unsought products Industrial Products
Convenience Products These are relatively inexpensive and frequently purchased consumer products. The consumer puts little effort into the purchasing decision and convenience takes priority over brand loyalty.
Shopping Products These are less frequently purchased consumer products that customers compare carefully on suitability, quality, price and style. This sort of purchase is usually only made after a good deal of advance planning and shopping around.
Specialty Products These are consumer products with unique characteristics or brand identification for which a significant group of buyers are willing to make a special purchase effort.
Unsought Products. These are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Examples are life insurance, magazine subscriptions, encyclopedias, donations for charity and blood donations.
WHAT IS PRICE? Price is the amount of money charged for a product or service, or the sum of all the values that consumers exchange for the benefit of having or using the product or service. (Philip Kotler - 12 th edition)
FACTORS TO CONSIDER WHEN SETTING PRICES Costs – Fixed costs, variable costs, marketing costs etc Demand Competition Marketing Objectives Government Regulation
PRICING STRATEGIES Cost Based/Internal oriented pricing Competitor-Based pricing Demand/Market Based pricing
DEMAND/MARKET BASED PRICING • Price skimming • Penetration pricing • Psychological pricing • Promotional pricing • Value-based pricing
3. 3. Pla Place ce (Di (Distribution) stribution)
The Role of Distribution Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means using intermediaries. To ensure that the products are available for customers at the right place , right time , in right quantities and in right conditions
2-stage Channel Manufacturer Wholesaler Retailer Consumer 3-stage Channel Manufacturer Agent Wholesaler Retailer Consumer
TYPES OF INTERMEDIARY • Retailers • Wholesalers • Distributors • Agents/Brokers • Franchise • Modern trade (supermarkets/Hypermarkets) • Vending machines • E-commerce (electronic retailing)
MARKET COVERAGE STRATEGIES INTENSIVE DISTRIBUTION SELECTIVE DISTRIBUTION EXCLUSIVE DISTRIBUTION
MARKET COVERAGE STRATEGIES INTENSIVE DISTRIBUTION Intensive distribution occurs when the product is placed in as many outlets as possible and no interested intermediary is barred from stocking the product. The key benefit to customer is that convenience and availability may be just around the corner. Example: convenience goods such as bread, newspapers, milk, soap, soft drinks etc.
SELECTIVE DISTRIBUTION A more selective approach in using a small number of carefully selected outlets within a defined geographical area to distribute the products. Example: shopping goods such as consumer durables, furniture, clothing etc which need a specialist retailer who might be expected to offer technical advice and after sales services.
EXCLUSIVE DISTRIBUTION Exclusive distribution is the opposite of intensive distribution, and means that only one outlet is used in a relatively large geographical area to distribute the product. Example: specialty products of high value and prestigious. (higher image control) Mercedes, Rolex watches, Designer labels etc.
4. 4. P Promoti omotions ons (C (Commun ommunication) ication)
Marketing promotions are the means by Inform which an organization Persuade attempts to inform, persuade (convince) Remind and remind consumers – directly or indirectly – about the products it sells Target Consumers
MARKETING COMMUNICATION MIX ELEMENTS • Advertising: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. (Philip Kotler) • Sales Promotion: A variety of short-term incentives to encourage trial or purchase of a product or service. (Philip Kotler) • Public Relations: Building good relationships with the company’s various publics by obtaining favorable publicity, building a good “corporate image” and handling or heading off unfavorable rumors, stories and events. (Philip Kotler)
• Personal Selling: Personal presentations by the firms sales force for the purpose of making sales and building customer relationships. (Philip Kotler) • Direct Marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate long term relationships. (Philip Kotler)
Print media – Newspapers, Magazines, directories Broadcast advertising – Radio, television, mobile phones Outdoor advertising – Billboards, posters Transport advertising – Buses, Trains Internet advertising – web based banners Cinema advertising – screen ads
AIDA MODEL ATTENTION INTEREST DESIRE ACTION
The End Thank You
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