Marketing

What is Marketing?
• An organizational function and set of processes for creating,
communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its
stakeholders.

• Best marketers not only give consumers what they want but even
anticipate consumers’ needs before those needs surface.
Developing Marketing Strategy
• First, study and analyze potential target markets and choose among
them.
• Second, create a marketing mix to satisfy the chosen market.
Target Market
• Target market: Group of people toward whom an organization
markets its goods, services, or ideas with a strategy designed to
satisfy their specific needs and preferences.
Market Segmentation
• Market segmentation Process of dividing a total market into several
relatively homogeneous groups.
Segmenting Consumer Markets
• Geographic Segmentation
• Divides market into homogeneous groups on the basis of their locations.
• Demographic Segmentation
• Divides market on the basis of various demographic or socioeconomic
characteristics.
• Common characteristics include gender, income, age, occupation, household
size, stage in the family life cycle, education, and ethnic group.
Segmenting Consumer Markets
Psychographic Segmentation
• Divides consumer market into groups with similar psychological characteristics,
values, and lifestyles.
• Start blogs to learn more about consumers’ lifestyles.
• Rely on the research of sociologists and psychologists.
Product-Related Segmentation
• Divides market based on buyers’ relationship to the good or service.
• Benefits sought focuses on the attributes that people seek in a good or service
and the benefits they expect to receive from it.
• Product usage rate defines such categories as heavy users, medium users, and
light users.
Marketing Mix
• Blending the four elements of marketing strategy—product,
distribution, promotion, and pricing—to satisfy chosen customer
segments.
Marketing Mix
• Product strategy involves the nature of the product and its package
design, brand names, trademarks, product image, customer service,
and other elements.
• Distribution strategy ensures that customers receive their purchases
in the proper quantities at the right times and locations.
Marketing Mix
• Promotional strategy blends advertising, personal selling, sales
promotion, and public relations to achieve its goals of informing,
persuading, and influencing purchase decisions.
• Pricing strategy is setting profitable and justifiable prices for the
firm’s product offerings, sometimes subject to government scrutiny.
Marketing Research
• Marketing Research is collection and evaluation of information to help
marketers make effective decisions
• Internal data
• External Data
• Secondary data
• Primary data
• Observation
• Survey
• Focus groups
Product
• Refers to the benefits of buying a product
• What need does the service/product fulfill
• Quality
• What will the quality of your service/product be?
• Features
• How will your product/service differ from the competition
• What will you do differently?
• Design
• How is it going to look?
Product
• Packaging – if your selling a product what image will the packaging
communicate?
• If a service – how will the appearance of your operation communicate an
image about your business
• Range of Products – what complimentary products may you offer
Product Line & Product Mix
• Product Line—group of related products that are physically similar or
are intended for the same market.

• Product Mix—company’s variety of product lines and individual

offerings.
Product Life Cycle
• Product Life Cycle – shows the stages that products go through from
development to withdrawal from the market
PLC Stages
• The Stages of the Product Life Cycle:
• Introduction/Launch
• Growth
• Maturity
• Decline
New Product Development
• Initial Ideas – possibly large number
• May come from any of the following –
• Market research – identifies gaps in the market
• Monitoring competitors
• Planned research and development (R&D)
• Luck or intuition – stumble across ideas?
• Creative thinking – inventions, hunches?
• Futures thinking – what will people be using/wanting/needing 5,10,20 years hence?
• Idea Screening
• Business Analysis
• Product Development
• Test Marketing
Introduction/Launch
• Advertising and promotion campaigns
• Target campaign at specific audience?
• Monitor initial sales
• Maximise publicity
• High cost/low sales
Growth
• Increased consumer awareness
• Sales rise
• Revenues increase
• Profits may be made
• Monitor market – competitors reaction?
Maturity
• Sales reach peak
• Cost of supporting the product declines
• Ratio of revenue to cost high
• Sales growth likely to be low
• Market share may be high
• Competition likely to be greater
• Monitor market – changes/amendments/new strategies
Decline
• Product outlives/outgrows its usefulness/value
• Fashions change
• Technology changes
• Sales decline
• Cost of supporting starts to rise too far
• Decision to withdraw may be dependent on availability of new
products and whether fashions/trends will come around again?
Product Life Cycle
Product Identification
• Brand—name, term sign, symbol, design, or some combination that
identifies the products of a firm and distinguishes them from
competitive offerings.
• Trademark—brand with legal protection against another company’s
use (can include pictorial designs, slogans, packaging elements, and
product features)
Product Identification
• Packages and Labels
• Packaging helps to achieve several goals:
• Protects against damage, spoilage, and pilferage
• Assists in marketing the product

• Label—descriptive part of a product’s package that lists the

brand name or symbol, name and address of the manufacturer
or distributor, product composition and size, nutritional
information for food products, and recommended uses
Price
• Marketing is responsible for establishing the price of their
service/product
• Must consider the costs of all the inputs (materials, labour, etc)
• Mark-up Price – How much profit do you want to make on every
product/customer
• Example: Selling Cupcakes
• Every cupcake uses $1 of materials and labour roughly costs $0.25 to
make one muffin
• You must charge at least $1.25 to break-even
Price
• Different Pricing Strategies
• Competition – basing your prices on those of the competition
• Penetration – making your price low while new just to get some
business
• Bundle – putting the product/service with another item and
bundling the prices
• Psychological – making the price say something about the quality
of your product
Price
• Everyday Low Pricing and Discount Pricing—Strategy devoted to
maintaining continuous low prices rather than relying on short-term
price-cutting tactics

• Skimming pricing strategy—sets an intentionally high price relative

to the prices of competing products
Place
• Place refers to how & where you are going to sell the product to the
consumer

•Distribution Channel—path through which products flow from

producer to consumers or business users.
Place
• Direct Distribution – selling your product directly to the consumer

• Indirect Distribution – sold through a 3rd party

Place
• Distribution Channels Using Marketing Intermediaries
• Retailer—channel member that sells goods and services to
individuals for their own use rather than for resale.
• Wholesaling Intermediary—channel member that sells goods
primarily to retailers, other wholesalers, or business users.
Distribution Channels
Promotion
• Promotion—communication link between buyer and seller that
performs the function of informing, persuading, and influencing a
purchase decision.

• A successful product or service means nothing unless the benefit of

that product/service can be communicated to the Target Market

• There are many ways to get the “word out”

Advertising
• Newspaper
• Television
• Radio
• Magazines
• Direct Mail
• Outdoor Advertising
• Online and Interactive Advertising
• Sponsorship
Personal Selling
• Personal selling—interpersonal promotional process involving a
seller’s face-to-face presentation to a prospective buyer. Used most
often when:
• Customers are relatively few in number and geographically concentrated
• Product is technically complex, and requires special handling
• Product is high in price
• Product moves through direct-distribution channels
Sales Promotion
• Sales promotion—non-personal marketing activities other than
advertising, personal selling and public relations that stimulate
consumer purchasing and dealer effectiveness.
• Sales promotion consists of forms of promotion such a coupons,
product samples, and rebates that support advertising and personal
selling.
Public Relations
• Public Relations—organization’s communication and relationships
with its various audiences.

• Publicity—stimulation of demand for a good, service, place, idea,

person, or organization by disseminating news or obtaining favorable
unpaid media presentations.
Promotional Strategies
• Pushing and Pulling Strategies
• Pushing strategy—promotional effort by a seller to members of the
distribution channel intended to stimulate personal selling of the good or
service, thereby pushing it through the channel

• Pulling strategy—promotional effort by a seller to stimulate demand among

final users, who will then exert pressure on the distribution channel to carry
the good or service, pulling it through the distribution channel