Marketing Concepts
Download
Report
Transcript Marketing Concepts
Marketing Concepts
4 Ps of Marketing
Product
Price
Place
Promotion
These are referred to as the
marketing mix, and they must be
properly combined for an effective
marketing campaign
Product/Service Mix
Mixing of product and service
e.g. retail stores such as Sears add
extras to the products they sell such
as delivery, installation and
extended product warranties
Can also have a service business,
such as a movie theatre, that also
sells products, e.g. popcorn
Price
How much is charged for the
product or service
Can determine the success or
failure of a product
Consumers are very aware of price
and compare brands and stores
Marketers need to know if
consumers are price sensitive
How much sales will go up or down
based on changes in price
Place
Also known as channels of
distribution
Paths of ownership or control that
goods follow as they pass from
producer to consumer
Methods that a business uses to sell
and distribute its products
Types of Place
Direct
Indirect
Specialty
Direct Channel
Connects buyers to businesses that
are selling the goods or providing
services
No intermediaries (middle person)
to increase the cost
Known as maker-user relationship
Indirect Channel
Have one or more intermediaries
Could be an importer, wholesaler or
retailer
Importer
Someone who searches for foreign
businesses that want to sell their
product to Canadian consumers
Can have exclusive rights to distribute
the product in a certain region/country
Wholesalers
Individuals or companies that buy
goods from producers or importers
and resell the products to retailers
Why use a wholesaler?
Can buy in smaller quantities vs.
buying directly from manufacturer
Usually located closer to the
wholesaler
Specialty Channels
An indirect channel of distribution
that does not involve a retail store
Examples:
Vending machines
Telemarketing
Catalogue sales
E-commerce
Door-to-door sales
Promotion
Any attempt to sell a product or
service
Sales promotions encourage
consumers to buy products using:
Coupons
Contests
Premiums
Samples
Special events
Coupons
Offering consumers money off of the price
of a product
They are treated like cash
Most coupons end up in the garbage
Redemption Rate
Measures the effectiveness of a coupon
program
The larger the coupon, the higher the
redemption rate
Average is about 5%
Contests
A way to increase brand recognition
and sales
Law requires people to demonstrate
a skill or answer a skill-testing
question
e.g. Tim Hortons Roll up the Rim
contest
Premium
Giveaways
Sometimes the consumer gets
something for free when purchasing
a product
e.g. a toy in cereal box
Customer loyalty cards are another
method
Stamped each time the consumer
makes a purchase
Samples
Encourage consumers to try a
product
Often small “trial” sizes of the
product
Sometimes distributed door-to-door
or at the supermarket
An effective way to increase sales
but expensive
Special Events
Organizing special events to attract
consumers and increase product
sales
e.g. book signing, celebrities that
promote shoes, perfume
Two Cs of Marketing
Consumer
Competition
Must consider these when
developing the marketing mix
Consumer Market
Companies study the types of
consumers that buy their products
Can be identified by:
Demographics
Lifestyle
Demographics
The study of obvious characteristics
that categorize people, such as:
Age
Gender
Family life cycle
Household income
Ethnicity and culture
Lifestyle
Competition
Competitive market
Consists of all the sellers of a specific
product
Often expressed in terms of annual
spending on a specific product
Market share
The % of the market that a company or
brand has
Competition continued…
Market Segment
Part of the overall market that has
similar characteristics
e.g. soft drink market would have a
diet segment, flavoured segment
Competition continued…
Direct Competition
Competition between products that
are very similar
e.g. Ritz Crackers vs. Premium
Plus crackers
Indirect Competition
Competition between products or
services that are not directly related
to each other
e.g. movie and pizza
Income
Discretionary Income
The portion of disposable income
that is not already committed to
paying for necessities and can be
used to buy items for comfort and
pleasure
Income continued…
Disposable Income
The amount of income that is left
after taxes have been paid
Could be used for basic necessities
such as food, shelter and clothing