Principle s of

Market ing

Burapha University

953381

Principles of Marketing
Burapha University International College

Positioning
Achieving Positioning.

Positioning
Achieving Positioning.
In marketing, a customer value proposition (CVP) consists of the sum total of benefits which a vendor promises a customer will receive in return for the customer's associated payment (or other value-transfer).

Investopedia. (2010). Value Proposition. Retrieved 4 22, 2010, from Investopedia: http://www.investopedia.com/terms/v/valueproposition.asp

Positioning
Achieving Positioning.
A Marketing value proposition (MVP) is an offer that describes the quantifiable benefit(s) that the individual(s) or organization(s) making the offer promise(s) to deliver.

Capturing Buyers' Attention: What makes a value proposition compelling? On: http://www.bbmarketingplus.com/blog/2008/11/05/captu ring-buyers-attention-what-makes-a-value-propositioncompelling/

Positioning
Marketing Value Proposal.
Image

Marketing Value Proposal

Product

Price

Manage MVP
Management Image

Management
Marketing Value Proposal

Product Management

Price

Image Management
In the factory we make cosmetics, in the store, we sell hope

Charles Revlon, Revlon founder

Image Management
Psychological Expectations
Image

Image Management
Image answers the targets psychological expectations.
Self-actualization Esteem Needs
Social Needs Safety Needs Phisiological Needs
Personal growth and fulfillment

need to be respected, to have self-esteem, selfrespect

belonging and acceptance yearning for a predictable, orderly world in which injustice and inconsistency are under control literal requirements for human survival

Image Management
Image dimensions

MindShare
(Awaremess)

HeartShare
(Identity)

Image Management
Image dimensions
Identity

Image = Awareness & Identity

Awareness

Image Management
Image dimensions
Identity HTC Porsche

Kate Moss

Awareness

Image Management
Image dimensions
Identity

Kate Moss

Awareness

Image Management
Image vehicles
Brand (trademark), Symbols, Style, Word of mouth, People Media

Image Management
Brands & Trade Marks The Brand name itself means something to customers. It is a powerful unconcious vehicle.

Roles:
To identify To differentiate To guarantee To carry the image

The brand is a valued asset

(goodwill)

Image Management
Symbols.

Image management
Symbols.

Image management
Symbols.

1956

Image management
Symbols.

2003

Image management
Symbols.

Roles of symbols: alleviating perceived risk and making promise of satisfaction more tangible

Image management
Symbols.

Image management

Image management

Image management

Image Management
Symbols.
View : Lacoste crocodile, Perrier bottle, Coke bottle Smell : perfume in washing detergents, new cars Touch : yoghurt glass jars Taste : mint toothpaste Hearing : music

Image Management
Symbols.

Image Management
Symbols.

http://www.youtube.com/watch?v=6RnDx7T0qgo&feature=related http://www.youtube.com/watch?v=0B_GY9hkSWs

Image Management
Symbols.

John McEnroe

Image Management
Symbols.

Jim Carrey

Busta Rhymes

Missy Eliott

LL Cool J

Image Management
Style

The less a product is tangible, the more its style is important :

complicated products services

Therefore importance of :
packaging design shopping environment company offices

Image Management
People
In service activities (pure service or added service) consumption is simultaneous to production. Interactions between front line personnel and customers influence directly customers perception Thats why Human Resource Management has now become a marketing tool

Image Management
Media Earned media (or free media) refers to favorable publicity gained through promotional efforts other than advertising, as opposed to Paid media, which refers to publicity gained through advertising.

Image Management
Word of mouth
Is the most powerful Marketing vehicle, but the most difficult to control!

Image Management
Asignment
Choose a brand and describe its image.

Manage MVP
Management Image

Management
Marketing Value Proposal

Product Management

Price

Price Management

No Brand loyalty can resist a price cut!

Price Managemet
Price

Is a component of profitability for the seller

Is a sacrifice against a promise of satisfaction for the customer

Price Managemet
Price
Ceiling: Preceived Value

PRICING

Floor: Unit Cost

Price Management
Four Key Factors.

Price Management
Price as a microeconomic item
P
Consumers surplus

Costs Turnover
Unit Cost

Price Management
Effects of a Price cut.
P

P1
Loss

P1

P2

P2

2Gain

Unit Cost

Q1

Q2

Price Management
Elasticity.

P2

P2

P1

P1

Q2

Q1

Q2

Q1

Price Management
Elasticity.

Delta Q/Q E= Delta P/P Delta Q/Q > Delta P/P Delta Q/Q < Delta P/P
E>1

E<1

Price Management
Break Even
P

P1 C2
C= P

P1 Break Even Point

Unit Costs

P2 C1

P2

Fix Costs

Q1

Q2

Price Management
2 approaches Skimming Demand: Inelastic

Production capacity: Limited

Barriers to entry: High Condition: Perceived Value

Price Management
2 approaches Penetration
Demand: Elastic Production capacity: Over capacity Barriers to entry: Low Condition: Cost advantage

Price Management
Discriminatory Pricing
P P

Unit Cost

Costs
Unit Cost

Costs
Q

Price Management
Discriminatory Pricing
P P

P P P

Costs
Unit Cost

Costs

Unit Cost

Price Management
Commonly used policies and disturbing events

Skim the cream vs penetration pricing Leader vs followers Cost price + uniform margin (not recommended) Price wars Temporary undercapacity Dumping Government regulations Private and public bids .

Price Management

Manage MVP
Management Image

Management
Marketing Value Proposal

Product Management

Price

Product Management
Definition
In marketing, a product is anything that can be offered to a market that might satisfy a want or need
Kotler, P., Armstrong, G., Brown, L., and Adam, S.
(2006) Marketing, 7th Ed. Pearson Education Australia/Prentice Hall.

People buy products in order to solve problems Products are problem solving tools
Levitt, Theodore

Product Management

Product Management
Levitts Total Product.
POTENTIAL

Generic product :
Just the basic characteristics

Expected product :
Includes customers minimum expectations. Customers will not buy as long as these expectations are not met.

AUGMENTED

EXPECTED

Augmented product : Everything that the marketer can

offer beyond expectations the customers

GENERIC

Potential product :
Anything that could still be done to attract new customers or develop loyalty

Product Management
Levitts Total Product.
POTENTIAL

Each ring carries service activities or tangible attributes the final product is made of:
Packaging Training Installation After sales service Guarantee Use & care instructions

AUGMENTED

EXPECTED

GENERIC

Product Management
Levitts Total Product.

Product Management
Levitts Total Product.
The basic product (generic) is not the real product.

The total product is the concrete expression of the positioning.

Products can be tangible or intangible. Often, they are a combination of both.

Product Management
Asignment
Chose a product and break it down according to Levitts Total Product theory.

Product Management
Product Life Cycle
Sales

Time

Product Management
Introduction Sales Price Competition Low High Limited Growth Increasing Decreasing Increasing Maturity Maximum Lowest Maximum Decline Falling Increasing falling

Marketing Objectives
Products Profits Clients Distribution Advertizing Objectives

Create market
Few Negative Pioneers Selective Primary demand

Market share
Wider range Increasing Followers Spread out Secondary demand

Market share
Diversity Maximum the falling Mass Diversified Differenciation

Cash
Shrinking Falling Traditional Selective Reduction

Product Management
Product Life Cycle
Need to answer the following questions :
When to introduce / remove a product ? What means behind what product ? Which trade offs of means between the products ?

2 major variables : attractiveness and competitive position

Product Management
BCG Product Management Model

Growth

Relative Market Share

1/2

Positioning
MVP, Coherence!

Image

Marketing Value Proposal

Product

Price