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Marketing
Definition
The process by which
companies create value for
customers and build strong
customer relationships in
order to capture value from
customers in return.
Marketing is managing
profitable customer
relationships.
Peter Drucker
Goal of all organizations is to
Goods
Services
Properties
Experiences Organizations
Events
Persons
Information
Ideas
Communicating information
about those goods and
services to prospective
Marketing is....
getting the right products to
the right people at the right
price and at the right place
and time with the right
promotion
More simply:
Marketing is the
delivery of customer
satisfaction at a profit.
Customer Driven
Marketing Strategy
Market segmentation: dividing a market
into distinct groups of buyers who have
distinct needs, characteristics, or
behavior and who might require separate
products or marketing programs
(geographic, demographic,
psychographic, and behavioral factors)
Market segment: a group of consumers
who respond in a similar way to a given
set of marketing efforts. Expensive car
buyers. Cost sensitive buyers.
Niche Marketing
When a company decides to serve only
one or few special segments or market
niches, it is involved in niche marketing.
Such nichers specialize in serving
customer segments that major
competitors overlook or ignore.
Ferrari 1500 cars in US.
Ferrari Superamerica $287,020
Ferrari FXX super sports car $ 2 million
Jones Soda
What is a product?
Anything that can be offered to a market
for attention, acquisition, use, or
consumption that might satisfy a want or
need.
Include physical objects, services,
events, persons, places, organizations,
ideas, or mixes of these entities. iPod,
Camry, BigMac. Doctors advice, vacation
service, financial services.
Service is any activity or benefit that one
party can offer to another that is
essentially intangible and does not result
in the ownership of anything.
Industrial Product
Product bought by individuals and
organizations for further processing or
for use in conducting a business.
Materials and parts (wheat, cotton,
livestock, crude petroleum) (iron, cement,
wires, tires, motors)
Capital items (buildings, generators,
trucks etc)
Supplies and services (lubricants, coal,
paper, pencils, paints, brooms,
conservancy items
Individual product
decisions
Product line decisions
Product mix decisions.
Branding
Brand is a name, term, sign, symbol, or
design, or a combination of these, that
identifies the maker or seller of a product
or service.
212 Men, Swatch etc
Hardly anything goes unbranded
Branding helps consumer identify
products that might benefit them. Say
something about quality and
consistency.
Building and managing brands are the
marketers most important tasks.
Packaging
Involves designing and producing the container
or wrapper for a product.
Cluttered shelves, attracting attention,
describing the product, to making the sale.
300 items per minute. 60 % of all purchases are
made on impulse.
Poorly designed packages can cost companies.
Heinz bottle design.
Chip Ahoy by Kraft Foods
Juice packs
Product safety
Environmental concerns
Labeling
Labels: tags attached to
products. Identifies the product
or brand, Frooti stamped on
orange, zenith etc.
Who made it, where it was
made, when it was made, its
contents, how it is to be used,
how to use it safely.
Marriot Example
Renaissance Hotels & Resorts: top
executives
Marriot: upper and middle managers
Courtyard: salespeople & road warriors
Fairfield: vacationers and business
travelers on tight budgets.
ExecuStay: temporary housing for 30
days
Residence Inn: for people who travel for a
living
Branding Strategy
Major asset of a company.
Are more than names and symbols. They
represent consumers perceptions and
feeling about a product and its
performance. Brands exist in the minds
of consumers.
Real power: to capture consumer
preference and loyalty.
Coca-Cola, Tide, Nike, Harley-Davidson,
Disney forge deep connections with
customers.
Branding Strategies
Brand positioning:
Position product in target
customers mind
Product Attributes
Desirable benefits Volvo, FedEx,
Lexus, Nike
Strong beliefs and values strong
brands engage customers on a
deep, emotional level (empower
socially)
Brand Sponsorship
A product may be launched
as:
Manufacturers brand
Private brand
Licensed brand
Co-brand
Brand Development
Line extensions: Extending an existing
brand name to new forms, colors, sizes,
ingredients, or flavor of an existing
product: Nestle Pure Life
Coke: Diet Coke, Diet Coke with Splenda,
Coca Cola Zero
Diet Cherry Coke, Diet Coke with Lemon,
Diet Coke with Lime, Diet Coke Black
Cherry Vanilla, Caffeine Free Diet Coke
Coca Cola C 2.
Brand Extensions
Extending an existing brand
name to a new product category
Kimberly Clark Huggies
Brand: Shampoos, Lotions,
Baby Wash
Brinks Brinks Home Security
System
Multi Brands
New Brands
Additional Brands in the same
category
P& G: different features for
different buyers
Existing wane new brands
needed
Matsushita Panasonic,
Technics, JVC, Quasar
PLC S Curve
Introduction Stage
Product launch
Takes time
Slow growth
Negative profits
High promotion and
distribution cost
Growth Stage
Product, if satisfies market, enters
growth stage
Sales climb quickly
Early adopters continue, new join
through favorable word of mouth
New competitors enter market
Competition increase in sale points
Spread of sales, unit cost reduces
Sustain rapid growth
New market segments
Prices may be lowered to attract more
customers (iPod)
Maturity
At some point sale slows down, product
enters maturity stage
Lasts longer
Marketing management most of the time
deals with mature products
More producers selling the same product
Greater competition
Prices down, increase in sales promotion
Drop in profit
Well established competitors stay
Maturity
Product manager should modify
market, product and marketing mix
Market: increase consumption of
product, new users, present users
Product: quality, features, style
(milk pak, Honda City)
Four Ps
Decline Stage
Eventually dip
Oat meal, VHS tapes, VCR, Tape recorders
Reasons: technology, consumer tastes,
increased competition, profits decline,
withdrawal from market
Furthermore:
Weak product costly to firm
Management time
Price adjustments
Advertising/sales efforts
Reputation of other co products affected
Old Spice/ co can sell brands