Beruflich Dokumente
Kultur Dokumente
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Chapter6:marketing
Marketing
Marketingistheprocessofdevelopingaproductandimplementingaseriesofstrategiesaimedatcorrectlypromoting,
pricinganddistributingtheproducttoacoregroupofcustomers.
Thepurposeofthisistodeterminewhatthebusinessshouldbeproducing.
Marketingisusedprimarilybyabusinessasamethodofenhancingitsrevenuestreamsandincreasingthemarkets
awarenessofitsproducts.
Thestrategicroleofmarketing
Thestrategicroleofmarketingextendsalsotosocietywhichincludes:
o ChoiceBusinessesdifferentiatethemselvesfromtheircompetitorsthroughprice,productqualityandfeatures
andservice.Alltheseprovideconsumerswithgreaterchoicewhenpurchasingaproduct.
o StandardoflivingBusinesseswilloftendevelopandmarketproductsthatimproveandenhancestandardof
living.Toprovideconsumerswithbetterproducts.
o EmploymentToprovideaproducttoconsumers,businessesmustemploylabourtoassistintransforminginput
resourcesintofinishedproducts.Labourisalsorequiredtosellthesegoodsandservices.
o BrandawarenessBrandawarenessreferstotheextentthatcustomersareawareofaproduct/brandandits
features.Itisachievedthroughstrongandeffectivemarketingcampaigns.
Allofthisisdonetoincreasethemarketshare.Marketsharereferstothepercentageoftotalsalesabusinesshas
comparedwithitscompetitorsinaparticularmarket.Itincreasesthebusinessssalesandprofitability.
Interdependencewithotherkeyfunctions
Eachkeybusinessfunctionmustworkeffectivelywithotherfunctionstoensurethegoalsofthebusinessareachieved.
Operationrelateswithmarketingasitneedsthedatafrommarketingtoknowwhattoproduce
Humanresourcesrelateswithmarketingasstaffmustbemotivatedandskilledtodevelopproducts.Itisthroughthe
marketingprocessthatabusinessisabletodeterminetheskillsneeded.
Accountingandfinancerelateswithmarketingasthebusinessneedstoseehowmuchmoneyitcanputintomarketing.
Approachestomarketing
Marketingisaimedatincreasingproductawarenessandsales.Therearethreecoreapproachestomarketing:
o Productionapproach(19201930s)Reliesontheviewthatconsumersbasetheirpurchasingdecisionsonthe
qualityoftheproduct.
o SellingapproachBasedonthebeliefthatabusinesswillbesuccessfulinsellingaproductifitisabletopromote
thebenefitsoftheproducttoitstargetmarket.Itdoesnotlistentothetargetmarket.
o MarketingapproachThebasisofwhichisthatthecustomerisatthecoreofallbusinessactivities.Itinvolves
adoptingacustomerorientationwiththebeliefthatallactionsinthebusinessshouldbeaimedatsatisfyingthe
needsofthecustomer
Typeofmarkets
Theproductionandsaleofgoodsandservicesisnotrestrictedortargetedsolelytocustomers.
Someorganisationssimplybuyafinishedgoodfromamanufacturertoselltoconsumers.
Thereisadiverserangeofmarketsthatdemandgoodsandservices.Thetypeofmarketsthatdontselltocustomerare:
o Resourcemarketsthosemarketswheretheproductionandsaleofrawmaterialsoccurs.ExamplesareBHP
BillitonandRioTinto.
o Industrialmarketswheregoodsthatareusedassuppliesintheproductionprocessaretraded.E.g.construction,
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agriculture,mining,manufacturing.
o Intermediatemarketscommonlyreferredtoaswholesalers.Theysellproductstoretailbusinessesthathave
beenproducedbyotherorganizations.E.g.ArmstrongElectricalWholesalers.
Consumermarkets
Consumermarketsconsistofthefollowingmarkets:
Massmarkets:Wheretheproductsareaimedatallconsumersirrespectiveoftheirage,gender,residentiallocationor
income.Theseapplytogoodsandservicesthatappealtoalltypesofconsumers.Electricity,waterandpostalservicesare
examples.
Marketsegments:whereabusinesschoosestofocusononlyoneareaofparticularmarket.E.g.Womenaged2050years
old.
Nichemarkets:asmallersectionofamarketsegment.E.g.luxurycars,luxurywatchesandfashion
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Chapter7:influencesonmarketing
Factorsinfluencingconsumerchoice
Therearefourmainfactorsthatinfluenceconsumerandorganisationalpurchasingdecisions.
PsychologicalInfluencesPsychologicalfactorsarepersonalcharacteristicsofanindividualthataffecthisorherbuying
behavior.Theyinclude:
Perceptionistheprocessthroughwhichpeopleselect,organiseandinterpretinformationtocreatemeaning.
Individualsactonperceptionsofrealityratherthanrealityitselfthusmarketingmanagersmustcreatea
positiveperceptioninthemindofthecustomerthroughcertainimagessuchastrendyandclassy.
AttitudesAnattitudeisapersonsoverallfeelingaboutanobjectoractivity.Itgenerallyinfluencesthe
successorfailureofabusinesssmarketingstrategy.
LifestyleDifferentlifestylesattractdifferenttypesofproductsandservices.
PersonalityandselfconceptThewayweviewourselvesandthewaywerespondtootherpeoples
perceptionofus.Peoplethatdonotcareaboutluxury,willnotbuyRolexwatches.
SocioculturalInfluencesareforcesexertedbyotherpeopleandgroupsthataffectanindividualsbuyingbehaviour.
FamilyandRolesEveryoneoccupiesdifferentrolesinwithinthefamilyandgroupswithinthewider
community.Forexample:menaremorelikelytobeseenpurchasingtoolsandcarswhereaswomenpurchase
healthcareandlaundryproducts.However,rolesarechangingandmarketersarebeginningtounderstand
thataswell.
Reference(Peer)GroupsAreferenceorpeergroupisagroupofpeoplewithwhomapersonclosely
identifies,adoptingtheirattitudes,valuesandbeliefs.E.g.ifafriendtellsyouthattheyhadabadexperience
atacertainstore,youwillmostprobablyalteryourbuyingbehaviour.
EconomicInfluenceshaveanenormousimpactonthebuyingbehaviourofbusinessesandcustomers.Thelevelof
economicactivityfluctuatesanditsfourdistinctphasesinfluencesthemarketingenvironment.
Boomisaperiodoflowunemploymentandhigheconomicgrowthwhichleadtohigherincomes.Thisisthe
phasewherebusinessesandconsumersareoptimisticaboutthefuture.Customersarewillingtospendand
businessesattempttoincreasetheirmarketsharebypromotingheavily.Thepotentialmarketingduringthis
phaseisusuallylargewithmoresales.
Contractionisaperiodofhighunemployment,sloweconomicgrowthandstabilisingincomes.Customers
andbusinessesbecomepessimisticandreducetheirspendingandinvestment.Marketingplansduringthis
phasestressthevalueandusabilityoftheproduct.
Recessionseesunemploymentreachhighlevelsandincomesfalldramatically.Thereisalackofconfidence
intheeconomyandaverysmalllevelofspending.Marketingduringthistimeshouldconcentrateon
maintainingexistingmarketshare.
GovernmentInfluencesandpoliciesdirectly/indirectlyinfluencebusinessactivityandcustomersspendinghabits,andas
such,willinfluencethemarketingplan.
o Interestratesaresignificantindeterminingthelevelofexpenditureintheeconomyandthelevelofcreditthat
consumersandbusinesswillaccess.
o Itdoesthisthroughitsuseoffiscalandmonetarypolicies,microeconomicreformandagerestrictionsplacedon
thepurchaseofspecificproducts.
Consumerlaws
Roleofconsumerlaws
TheCommonwealthGovernmentcontrolsbusinessbehaviourthroughtheCompetitionandConsumerAct2010(Cth).This
legislationattemptstopromotefairandcompetitivebehaviourinthemarketplace.
Deceptiveandmisleadingadvertising
Somebusinesswilladvertiseinwaysthatarewrongorunethical.Examplesofdeceptiveandmisleadingadvertisingunder
theCompetitionandConsumerActinclude:
o overstatingthebenefitsthatproductsprovide
o offeringdiscountsandspecialoffersthatdontexist
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o usingbaitandswitchadvertisingpromotesaproductthatisheavilydiscountedeventhoughthebusinesshasvery
limitedsupplies
Pricediscrimination
Pricediscriminationreferstotheprocessofabusinessgivingpreferencetosomeretailstoresbyprovidingthemwithstock
atlowerpricesthanisofferedtothecompetitorsofthoseretailers.
Thecompetitorsarebeingdiscriminatedagainstbybeingforcedtopayahigherpriceforaproductthatisidentical.
Impliedconditionsandwarranties
Impliedconditionsortermsareunspokenandunwrittentermsinacontract.Thetwomostimportanttermsare:
Merchantablequalitymeansthattheproductisofastandardareasonablepersonwouldexpectforthe
price.
Fitnessofpurposemeansthattheproductissuitableforthepurposeforwhichitisbeingsold.
Awarrantyisapromisebythebusinesstorepairorreplacefaultyproducts.Allbusinesseshavecertainobligationswith
regardtotheproductstheysell.
Regardlessofwhethertheproductiscarryingawarranty,abusinessmust,bylaw,eitherrefundaclientsmoneyorofferan
exchangeofthegoodshouldthegoodberecognizedtohavebeenfaultyatthetimeofleavingthestore.Thisiswhyall
productsaresaidtohaveanimpliedwarranty.
Resalepricemaintenance
UndertheCompetitionandConsumerAct,amanufacturercannotrefusetosellgoodstoaretailerwhodecidesnottosell
thegoodatthepricethatissuggestedbythemanufacturer.
Amanufacturercannotdiscriminateagainststoresforsellingatapricethatislowerthanithasrecommended.
Ethicalandlegalaspectsofmarketing
Ethicsinmarketingreferstoacombinationofbroadprinciplesthatestablishstandardsofbehaviourandguidelinesfor
peopleworkingacrossthemarketingindustry.
Theyarenotenforceablethroughlaw.
Truth,accuracyandgoodtasteinadvertising
Itisexpectedthatwhenpromotionalmaterialisdistributed,thismaterialrepresentsinformationthatistruthful,accurate
andingoodtaste.
TheCompetitionandConsumerActprohibitsacorporationfromsupplyingconsumergoodsthatdonotcomplywith
prescribedproductsafetystandards.
TheAdvertisingFederationofAustralia(AFA)isthepeakbodyrepresentingcompaniesinadvertisingandmarketing
communications.Itseekstopromotethebestpracticesinadvertising.
Usingsomewhatcontroversialadvertisementstopromotesocialissues,whileatthatthesametimesellingitsbrandname.
Productsthatmaydamagehealth
Productsandservicesthatdamagepeopleshealthareregardedassinproducts,sothegovernmentputsrestrictions.
Theyinclude:
o restrictionsontobaccosponsorshipentriesintocasinos
o RestrictedopeninghoursforleaguesandRSLclubsforgambling
o Packetscontainhealthwarningsforcigarettes
Engaginginfaircompetition
TheroleoftheAustralianCompetitionandConsumerCommissionistoregulatebusinessbehavior.
Unfaircompetitivebehaviorincludes:
o pricefixingbetweentwoormoremajorcompetitors
o longtermlossleaderpricingstrategybyundercuttingsmallercompetitors
o misleadingadvertisingregardingproducts
AustralianCompetitionandConsumerCommission
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TheACCCattemptstoregulatethelevelofcompetitionwithinarangeofindustries.Itaimstopromotefairandethical
behaviourbybusinessestowardstheircompetitorsandallowsbusinessestolodgecomplaintsagainstcompetitors
regardingbehaviourthattheydeemtobeunfairandagainsttheActs.
Sugging
Sellingundertheappearanceofasurveyisasalestechniquedisguisedasmarketresearch.Thistechniqueisnotillegal,
however,itdoesraiseseveralethicalissuesincludinginvasionofprivacyanddeception.
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Chapter8:marketingprocess
Introduction
Planningisacentralactivityofanyorganisation.
Itallowsabusinesstoexamineitscurrentpositionwithinthemarket,consideropportunitiestostrengthenthatposition
anddeterminethemosteffectivemethodofimplementingtherequiredchanges.
Theelementsofamarketingplanare:
o Executivesummary
o Situationalanalysis
o Marketresearch
o Establishingmarketobjectives
o Identifyingthetargetmarket
o Developingmarketingstrategies
o Implementing,monitoringandcontrolling
Theexecutivesummary
Theexecutivesummaryprovidesabriefdescriptionofcurrentissuesfacingthebusiness.Itprovidesanoverviewofthe
goalsandstrategiesthataretobefeaturedintheplan.
Thesituationalanalysis
Thesituationalanalysisprovidesthefirmwithanopportunitytoexamineitscurrentpositionwithinthemarket.Thereare
twokeyelementstoasituationalanalysis.
o SWOT
TheuseoftheSWOTexercise(Strengths,Weaknesses,OpportunitiesandThreats)providesthe
informationneededtocompletethesituationalanalysisandgivesaclearindicationofthebusinesss
positioncomparedwithitscompetitors.
TheStrengthsandWeaknessesofthebusinessareinternalforcesastheyoperateinsidethebusinessand
alargelycontrolledbyit.
Doesthebusinesshaveagoodreputationamongstitsstakeholders?
Isthebusinessfinanciallystable?
OpportunitiesandThreatsaretheexternalforcesastheyoperateoutsidethebusinessandcannotbe
controlledbythebusiness.
Whatisthedegreeofcompetition?
Arecompetitorsreactingtothebusinesssproducts?
o Productlifestyle
Productanalysisexaminesthecurrentpositionofthegoodsand/orservicesthatabusinessproducesin
themarketplace.
thebusinesslifecycledifferentphasesoverthecourseofitsexistence.Therearefourphases,orstages,
tothebusinesslifecycle:
Establishmentwhenthenewproductisfirstlaunched.Profitsarelimitedbecauseofthelackof
revenue.Thebusinessisdevelopingaloyalcustomerbase.Penetrationpolicieswillbeused.
(usingalowpricetoestablishquickentry.
Growthprofitabilitywillgrowassalesexpand,costswillincreaseduringthisstage.Competitors
willcompeteformarketshareandmarketingstrategieswillneedtochange.Businesseslower
theirpricetodealwithcompetitors.
maturitysteadyincomestreamwithlimitedprospects,marketingstrategiesmodifiedto
ensureprofitcontinues.Theytrytodifferentiatethemselvesbypricedifferentiation,aftersales
service,ormakingiteasierforconsumerstoaccesstheproduct.
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postmaturityIncreasedcompetitionandchangingconsumerpreferences.Thereare4paths:
o declinecompetitionandchangesinthebusinessenvironment.Businessbeginsto
declineandlosemarketshare
o renewalproductsrevitalised,newpromotionalcampaigns,brandaltered.New
strategiesmaybedevelopedtoattractanewaudience.
o steadystatenochange,profitsstaythesame
o cessationthebusinessisshutdown.
Marketresearch
Thebusinessshouldknowthetypeofinformationthatitrequirese.g.Customerprofiles,brandawarenessetc.
Onceinformationneedsareestablished,thebusinesscandeterminethemostappropriateresearchmethod.
DataCollection(primaryandsecondary)Marketingdatareferstotheinformation,usuallyexpressedasfactsandfigures,relevant
tothedefinedmarketingproblem.
Primarydataarethefactsandfigurescollectedfromoriginalsourcesforthepurposeofthespecificresearchproblem.This
datacanbecollectedbythebusinessitselfbutitisveryexpensiveandtimeconsumingwhichiswhyitisusually
outsourced.Threetypesare:
o surveypersonalinterviews,questionnairesandtelemarketing,
o observationpersonalandmechanicallookatresearchandsurveillancefootage.E.g.askingquestion
o experimentalfieldteststoevaluatecauseandeffect.E.g.showingafilm
Secondarydataisinformationthathasalreadybeencollectedbysomeotherpersonororganisation.Thetwotypesof
secondarydataare:
o internaldatainformationthathasbeencollectedfrominternalsourcessuchasstatistics,feedbackandreports,
o externaldatapublisheddatafromothersourcessuchasmagazines,internetandtheABS.
DataanalysisandinterpretationStatisticalinterpretationanalysisistheprocessoffocusingonthedatathatrepresents
average,typicalordeviationsfromtypicalpatterns.Businesseswillanalyseandinterpretthecollecteddataso
managementcangainabetterunderstandingoftheimpactofthedataontheoperationsofthebusiness,andthen
determinethecourseofaction
Establishingmarketobjectives
BusinessesgenerallyadoptaSMARTapproachtosettingobjectives:
o S=specifictheobjectiveneedstobeclear
o M=measurablethebusinessneedstofindwaystomeasuresuccess
o A=achievablethebusinessneedstohavethefinancialandhumanresources
o R=realistictheobjectiveshouldbereasonable
o T=timethetimeframemustbereasonable
Marketingobjectivesshouldbecloselyalignedtotheoverallbusinessobjectives.Suchobjectivescanbemeasuredand
shouldincludespecifictargetstobemet.
o IncreasingmarketshareMarketsharereferstothebusinesssshareofthetotalindustrysalesforaparticular
market.Increasingmarketshareisofprimeimportanceforeachofthecompaniesinvolvedinanymarketthatis
dominatedbyonlyafewlargebusinesses.
o ExpandingtheproductrangeTheproductmixisthetotalrangeoftheproductsofferedbythebusiness.
Businessesareusuallyeagertoincreasetheirproductmixasthesamemixwillnotbeeffectiveinthelongterm
duethechangingtastesandpreferencesofconsumers.
o ExpandingexistingmarketsThedemandforsomeproductsvariesgreatlyfromonegeographiclocationto
another.Geographicalrepresentationreferstothepresenceofabusinessandtherangeofitsproductsacrossa
suburb,state,city,townorcountry.E.g.BlueScopeSteelisatransnationalcorporationthatallowsittobenearits
customers.
o MaximizingcustomerserviceCustomerservicemeansrespondingtotheneedsandproblemsofthecustomer
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andisperhapsthemostimportantobjective.Highlevelsofcustomerservicesusuallyresultsinimprovedcustomer
satisfaction.
Developingmarketingstrategies.
Marketinginvolvesanumberofstrategiesdesignedtoprice,promoteandplaceproductsinthemarketplace.The
marketingmixconsistsof4elementscalledthe4Ps:
ProductTheproductisacombinationof:quality,design,name,warranty,packagingandexclusivefeatures.
Customersbuyproductsthatsatisfytheirneedsaswellasprovidethemwithintangiblebenefits.
PriceTherightpriceneedstobechosentopreventtheproductfromnotsellingatallifthepriceistoohighor
receivinglowerturnoveraswellasacheapimageifthepriceistoolow.
PromotionThepromotionstrategyisthemethodthatistobeusedbythebusinesstoinform,persuadeandremind
customersaboutitsproducts.
PlaceDealswiththedistributionofthegoodorserviceandconsistsoftwopartswhichare:transportationandthe
numberofintermediariesinvolved.
Implementing,monitoringandcontrolling
Implementationistheprocessofputtingthemarketingstrategiesintooperation.Implementationofthemarketingplan
involvesintegratingitwithallthesectionsofthebusiness,establishinglinesofcommunication,motivatingtheemployees
andmakingthemfamiliarwiththemarketingobjectivesandstrategies.
MonitoringandcontrollingMonitoringmeanscheckingandobservingtheactualprogressofthemarketingplan.The
informationcollectedisusedtocontroltheplan.Controllinginvolvesthecomparisonofplannedperformanceagainst
actualperformanceandtakingcorrectiveactiontomakesuretheobjectivesareachieved.Thecontrollingprocessrequires
thebusinesstooutlinewhatistobeaccomplishedbyestablishingaperformancestandardwhichisaforecastlevelof
performanceagainstwhichactualperformancecanbecompared.Thecommonformsofanalysisare:
o SalesAnalysisisthecomparingofactualsaleswithforecastsalestodeterminetheeffectivenessofthemarketing
strategy.Benefitofthesalesanalysisisthatitisinexpensivetoproducehoweverthefiguresmaynotbe100%
accurate.
o MarketShareanalysis/ratiosreferstoabusinessevaluatingitsmarketingstrategiescomparedtoitscompetitors
throughanalysingthebusinessmarket.
o Marketingprofitabilityanalysisisamethodinwhichthebusinessbreaksdownthetotalmarketingcostsinto
specificmarketingactivities.Byassessingthecostsofthespecificmarketingactivitiesinrelationtotheprofit
levels,themanagercanassesstheeffectivenessofeachactivity.
DevelopingafinancialforecastAbusinessmustdevelopafinancialforecastthatdetailstherevenuesandexpendituresfor
eachstrategywhenevaluatingalternatives.Costbenefitanalysisisahelpfultoolusedtoitemizefixedandvariablecosts
anddrawupaprofitforecastshowingprofitandreturn.Developingafinancialforecastrequirestwostepsthatare:cost
estimatehowmuchthemarketingplanisexpectedtocostandrevenueestimatehowmuchrevenuewillbegeneratedas
aresult.
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Chapter9marketingstrategies
Introduction
Whendevisingamarketingstrategy,itisimportanttoknowwhototargetthemarketingact.Promotionalandpricingstrategies
mustcatertothetargetgroupchosen.
Marketsegmentation
Marketsegmentationistheprocessofbreakingdownatotalmarketintosmallmarketsbasedonthesimilarcharacteristics
ofacustomergroup.
Byfocusingonaparticulartargetgroup,abusinessisabletoidentifythespecificneedsofthisgroup.
Themarketingplanwouldconsiderthefeaturesthatconsumerofthetargetgroupsothatmarketingstrategiescanbe
determined.
Typesofsegmentation
Typesofsegmentationare:
Psychographicsegmentation:Theprocessofdividingamarketintosmallermarketsbasedonlifestyle,personality,values
andinterests.
Geographicsegmentation:dividingamarketorcustomergroupsintosmallermarketsbasedondifferentgeographic
locations.Byfocusingonaparticulartargetgroup,abusinessisabletoidentifythespecificneedsofthisgroupandtailorits
marketingplanaccordingly.
Demographicsegmentation:Theprocessofdividingamarketintosmallermarketsbasedonthecustomersage,gender.
E.g.girlsatolderageswouldbuymorematuremagazines.Girlswouldnotbuycarmagazines.
o Age:Consumerswilldemanddifferentproductsatdifferentstagesoftheirlife.OlderwomanreadCleo,whereas
youngchildrenreadDOLLY.
o Gender:whereconsumersdemandproductsdependingontheirgender.
o Income:Wheretheincomewillaffectwhatconsumersbuy.Inthecity,productswillbemarketedtowardsmiddle
andhighincomeearners.
o occupation
Behavioralsegmentation:dividingamarketbasedonpeoplesknowledgeof,attitudestowardsanduseofaproduct.Some
factorsare:
o Purchaseoccasion:whencustomerismostlikelytopurchaseproducts
o Usagerate:howoftencustomersusethebusinesssgoodorservice.E.g.Internetprovidershavemanypackages
dependingonrateofuse.
o Userloyalty:todevelopaloyalcustomerbase.E.g.WoolworthsEverydayrewardcardswasintroducedtoincrease
loyalty.
o Benefitssought:whatcustomerswantfromaproduct.
Product/servicedifferentiationandpositioning
Productdifferentiation
Productdifferentiationistheprocesswherebyabusinessdistinguishestheattributesandfeaturesofaproductfromthose
ofitscompetitorsproducts.Somestrategiestoemphasizeproductdifferentiationare:
Pricethecheapestproviderofaspecificrangeofgoods.E.g.BigWpromoteswithAustraliaslowestpriceseveryday.
ProductqualitythebestqualityforproductsaroundE.g.WoolworthsusesthesloganThefreshfoodpeople,
servicedifferentiation
Itinvolvesadirectandimmediateformofcontactbetweenthebusinessandtheconsumer.
Aftersalesserviceisatypeofstrategytoemphasizeservicedifferentiation.Thiswilldevelopintostrongbrandloyalty.
Marketingmix
Whendevisingmarketingstrategiesbusinessesneedtoconsiderthefourelementsofthemarketingmix:product,price,
promotionandplace.People,processesandphysicalevidencemayalsobeconsidered.Bycombiningallthese,wegetthe
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7Psifmarketing.
Products
Goodsand/orservices
Thetermproductcanrefertoeitheragoodorservice.Aproductoffersaconsumertangibleandintangiblebenefits.
Tangiblebenefitsrefertothephysicalattributesoftheproduct.Thesecanincludethedesignstyle,colourandfeaturesofa
product.
Intangiblebenefitsrefertothebenefitsaconsumerassociateswithpurchasingaproduct.E.g.Customercarehelpdesks,
warrantiesandcustomercarehelpdesks,warrantiesandmaintenancechecks.
Whendevelopingmarketingstrategiespositioning,brandingandpackagingneedtobeconsidered.
o Positioningtheimagethataproducthasinthemindofaconsume.Itisofprestigeandreliability.
o Brandingthereputationthatabusinessorproducthasdevelopedoveraperiodoftime.Astrongbrandnameis
importantinenhancingtherelationship,
o Packagingthephysicalappearanceofthegood.Itisoftenthefirstimageoftheproductthattheconsumerwill
see.
Price
Pricereferstotheamountofmoneyabusinesschargesforthepurchaseofitsproducts.
Abrandthatiswellestablishedandhighlyregardedmaysellforahigherpricewiththeexpectation
Pricingstrategies
Generalstrategies
Competitionbasedpricingconsiderstotalcosttothebusinessofmanufacturingorprovidingagoodorservicetothe
consumerandthenaddsanadditionalamount.
pricepointswhereabusinesssetsdifferentpricesforsimilarproducts.Theproductsaredifferentiatedbytheirfeatures.
Psychologicalpricingusedtotakeadvantageofthisconsumerresponse.E.g.$99ratherthan$100
Priceandqualityinteractionbasedonhowhighqualitytheproductsare.Higherquality=higherprices.
Fastsales
Penetrationpricingsettingpricesatthelowestpossiblepricetogainanimmediategroupofcustomers.Usedto
penetrateamarketandgainmarketsharerapidly.Itactsasanencouragementforconsumerstoswitchovertothenew
product.
Lossleaderprovidingalimitednumberofgoodsatapricethatgeneratesminimalprofitorevenalosstoencourage
consumerstopurchasegoodsfromthebusiness.Theaimofthispricingstructureistoenticeconsumersintoastorewith
cheaplimitedstock.Consumerswillthenbuymoreexpensiveproductsinthefuture.
Productdeletionusedtoclearstockthatthebusinessbelievesisnolongersellingorattractinginterest.
Greatestreturns
Marketskimmingusedbyabusinesswhenitwantstorecoverthehighcostsinvolvedinestablishingaproductand
releasingitontothemarketplacebysettingahighprice.
Demandpricingthehigherthedemandforaproduct,thestrongertheabilityoftheorganisationtochargeahigherprice
forthatproduct.
Prestigepricingusedforproductsthatconsumersregardasprestigiousand,therefore,forwhichtheyarewillingtopay
higherprices.
Promotion
Givesthebusinessitspublicimageandprofile.
Marketingisoftenthefirstformofinformationthataconsumerwillreceive.
Elementsofthepromotionalmix
Thepromotionmixisthatpartofthemarketingmixthatseekstogenerateinterestinandawarenessofaparticular
productorbrand.Itconsistsof:
o Personalsellingaimstoestablishadirectlinkbetweenthebusinessandtheconsumer.Itinvolvestakingthe
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businesstotheconsumer,someformsincludedoortodoorsales andpartyplans.
o Relationshipmarketingtheprocessofbuildingandmaintaininglongtermrelationshipswithcustomers.It
involvescreatingahighlevelofcustomersatisfaction,valueandservice.
o AdvertisingItseekstoconveyamessagetoabroadgroupofcustomers.Itincludesradio,televisionandthe
internet.
o SalespromotionItisintendedtocreateinterestinandgenerateawarenessofaparticularproduct.These
promotionsincludecompetitions,samples,anddiscounts.
o Publicrelationstheprocessofcreatinganeventforabusinesstogenerateawarenessofitsproducts,attracting
interestinthebusinesssactivitiesandproducts.
Thecommunicationprocess
Marketresearchwillallowthebusinesstodevelopstrategiesthatwillattracttheinterestoftheproductsintendedmarket.
Waysofcommunicationarevia:
o Opinionleadersbusinessuseindividualsinthecommunitythatarehighlyrespected.Theyhaveknowledgeand
expertiseandwillcreatealinkbetweentheleadersimageandreputation.
o Wordofmouthinvolvesconsumersrelatingtoothers,theirreactiontotheuseofaproduct,includingthedegree
towhichtheyweresatisfiedwiththeproduct.
Place/distribution
Theprocessofdistributingtheproductfromwhereitismadetotheconsumer.
Distributionchannelsthechannelsbywhichaproductismovedfromtheplaceofmanufacturetotheconsumer.
Intermediaryabusinessthatpurchasesthefinalproductandthentakesontheresponsibilityofsellingthisproducttothe
consumer.
Therearethreechannelsofdistribution:
o Producertoconsumerwherethegoodorserviceisproducedbyanindividual/organisationandisthenpassed
directlyontotheconsumer.Therearenointermediaries.
Advantages:Itallowstheproducertomaintaincontroloverallareasoftheproductandprovidesthe
producerwithadirectpointofcontactwithconsumers,.
o Producetoretailertoconsumerwherethegoodisproducedandthenpassedontotheretailerwhopassesit
ontoconsumers.
Advantages:Allowstheproducertoconcentrateonmanufacturing.Thereisgreaterdistributionand
accesstothegood.
o Producertowholesalertoretailertoconsumerwherethegoodisproducedandthenpassedonawholesaler
whosellspartofthestocktotheretailerwhopassesitontoconsumers.
Advantages:allowstheproducetoholdlesseramountsofidlestock.Marketingandsalestendtobethe
responsibilityoftheretailersolesscosts.
Channelchoices
Thechoiceofdistributionchannelwillinfluencethetypeofcustomerstheproductattracts.Thereare3distribution
channelcategories:
o Intensivedistributiontheproductisreadilyavailabletoawideselectionofstoresorlocations.Usedfor
convenienceitems.
o Selectivedistributioninvolvestheuseofalimitednumberofstores/locationstosellordistributeaproduct.
Allowsaproducertocontrolthemarket.Usedforfashionandelectronics.
o Exclusivedistributionwherethereisarestrictiononthenumberofproductsand/oravailabilityoftheproduct.
E.g.expensivejewelryandwatches.
Physicaldistributionissues
TransportTransportreferstotheprocessofmovinggoodsfromonelocationtoanother.Transportationcanbeexpensive
andthetypeofgoodneedstobeconsidered.
Warehousingtheprocessofstoringproductsbeforetheyaredistributedtotheconsumer.Theyareusedtostorefinished
productsandholdingstock.Somegoodscanonlybewarehousedforaverylimitedtimebeforelosinguse,e.g.foods.
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InventoryAbusinessmustensurethatithassufficientstocktosatisfydemand.Theyalsomustnotoverstockotherwise
clearancesalesareneeded.Thisreducesprofits.
People,processesandphysicalevidence
Thelast3Pswhicharepartofthe7Psofmarketingare:
People
havingtherightpeopletosupportthecompanysproductsand/orservice.Thismayincludedetailedproductknowledge
andattendingtocustomerconcernsinanunderstandingmanner.
Process
Theconsumerstotalexperienceofbuyingtheproductfromasimplestageofsearchingforinformationtothefinalstage
ofexperiencingthebenefits.
physicalevidence
Thephysicalappearanceoftheproductacrosseveryaspectofitspresentationtotheconsumer.
Physicalevidencemayalsorefertothepeoplewithinabusinessandthevisualpresentationthattheydisplaytoclients.E.g.
howemployeesactanddress.
Thepackagingneedstobeabletotalktotheconsumerasitisthefinalpointofpromotionwhereitisabletobe
communicated.
Emarketing
Internetmarketingisalsoknownasemarketing.Emarketingallowsabusinesswithonlineoperationstoreachaglobal
audience.
Thewebsitemustbecreativetoattracttheinterestofconsumerswhilefulfillingtechnicalaspectsofthesite.
Globalmarketing
Manybusinessesoperateincountriesbeyondtheirdomesticoperations.
Itprovidestheopportunitiestoincreasesales,furthertheirbrandawarenessandestablishmarketsinnewcountries.
Globalbranding
Itismoreeffectiveandefficienttopromoteabrandratherthanindividualproducts.
Abrandhasthesamemeaninginanylanguage.
Standardizationanddifferentiation
Owingtodifferencesinlanguage,religion,tastesandethicsitisveryimportantresearchesthemarket.Theproductmay
havetobechangedtosuitaspectsofdifferentcultures.
Marketingstrategiesinglobalmarkets
Product
Aproductsfeatureswillvaryfrommarkettomarkettosuitcustomersindifferentcountries.Labelsneedtoprintedin
differentlanguages.
Place
Placeinthemarketingmixreferstotheprocessofdeliveringtheproducttoconsumers.
Theinternethascreateda24hoursshop.
Havingagoodrelationshipwiththelocaldistributorisimportant.Itwillensureproductsaregiventheattentiontheyneed.
Competitivepositioninginvolvestheformalprocessofabusinessdetermininghowtodifferentiateitselffromits
competitors.Thismakesiteasierforconsumerstomakeachoice.Valuepropositionispartofthis,thereare3typesof
value:
o Operationalexcellencereferstotheabilityofthebusinesstoberunefficientlyasameansofproducingalow
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costoperation.Benefit:allowsthebusinesstopassoncostsavingstoconsumers.
o Customerintimacyinvolvesabusinessdevelopingapersonalisedprofileoftheircustomersshoppinghabitsso
thebusinesscandevisethecorrectmarketingstrategy.
o Productleadershipreferstohowthebusinesscanbethefirsttoproducethebestproduct.
Price
Becauseoftheadditionalcostsofexportingpacking,transportinsurance,documentationandcurrencyvariationa
competitivepriceismoredifficulttoestablish.Iftheproductisconsideredexclusive,thepricecanbesethigh.
Promotion
GlobalcanuseavarietyofmediumsliketheTV,internetandradio.language,religionandcultureneedtobeconsidered.
Namesdonotalwaystranslatewell.