Transcript Promotional - Department of Information Technologies

Business / Marketing Minor
Marketing Fundamentals
M21439
Session 4:
Marketing Mix Tools
Key Concepts
Theories relating to the analysis of :
- Product
- Physical Evidence
- Price
- People
- Place
- Process
- Promotion
Product
Product Offer
Potential Product
Augmented Product
Tangible Product
Core Product
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
SALES VOLUME
Product Life Cycle
Introduction
Growth
Maturity
Saturation
Decline
TIME
Source: Palmer, A. (2000) Principles of Marketing UK:Oxford
Product Life Cycle
Introduction:
Growth:
Maturity:
Saturation:
Decline:
New product launched to innovators
and early adopters
Rapid rate of growth, targeting early
majority
Rate of growth begins to slow down
Market has ceased to grow. Mainly
replacement demand
Changes in consumers’ preferences
or technology lead to a fall in sales
Source: Palmer, A. (2000) Principles of Marketing UK:Oxford
SALES VOLUME
(Rogers 1962)Pattern of Adoption
for a New Product
Innovators
Early
Adopters
Early
Majority
Late
Majority
Laggards
TIME
Source: Palmer, A. (2000) Principles of Marketing UK:Oxford
Major Elements of Brand Equity
Source: Adapted with the permission of The Free Press, a division of Simon & Schuster, Inc., from Managing Brand
Equity: Capitalizing on the Value of a Brand Name by David A. Aaker. Copyright © 1991 by David A. Aaker.
World’s Most Valuable Brands
Brand
Coca-Cola
Marlboro
IBM
McDonalds
Disney
Sony
Kodak
Intel
Gillette
Budweiser
Brand Value ($ millions)
47,978
47,635
23,701
19,939
17,069
14,464
14,442
13,274
11,992
11,985
Source: Dibb.S, Simkin.L, Pride.W & Ferrell.O(2001) Marketing – Concepts and Strategies 5th ed, US: Houghton Mifflin
UK’s Top 10 Brands, 1998
Brand
Owner
Sales (£m)
Advert Spend (£m)
Coca-Cola
Coca-Cola
580+
31.41
Walker’s crisps
PepsiCo
400 – 405
6.88
Nescafe coffee
Nestle
285 – 290
6.24
Andrex toilet tissue
Kimerley-Clark
205 – 300
9.25
Ariel laundry products
Procter & Gamble
200 – 205
21.91
Persil laundry products
Lever Bros
195 – 200
20.59
Pampers nappies
Proctor & Gamble
190 – 195
11.62
Pepsi
PepsiCo
190 – 195
10.91
Stella Artois lager
Whitbread
165 – 170
3.92
Muller yoghurt
Muller
160 - 165
2.46
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Packaging
An important part of the product that not only
serves a functional purpose, but also acts as
a means of communicating product
information and brand character.
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Functions of Packaging
• Functional:
packaging must protect the product in
storage, in shipment and often in use
• Promotional:
packaging used to add value to the brand.
Can be achieved through a combination of
materials, shape, graphics and colour
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Price
Factors Influencing Customers’ Price
Assessments
Functional
Quality
PRICE
ASSESSMENT
Financial
Operational
Personal
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
External Influences on the Pricing
Decision
Demand & price elasticity
Customers & consumers
PRICE
DECISION
Competitors
Legal & regulatory
Channels of distribution
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Factors Affecting Price Decisions
External Factors
Internal Factors
- Marketing objectives
- Marketing mix strategy
- Costs
- Organisational
considerations
Pricing
decisions
- Nature of the market and
demand
- Competition
- Other environmental
factors (economy,
resellers, government)
Source: Kotler.P & Armstrong.G (2001) Principles of Marketing 9th ed, USA:Prentice Hall
Price/Quality Strategies
Low
QUANTITY
High
Low
ECONOMY
PRICING
SUPER VALUE
(short-term penetration)
High
EXPLOITATION
(short-term skimming)
PREMIUM
STRATEGY
PRICE
Source: Adcock.D, Halborg.A & Ross.C (2001) Marketing – Principles & Practice 4th ed, UK:Prentice Hall
General Pricing Approaches
•
Cost-Based Pricing:
- Cost-plus pricing
- Break-even pricing
•
Value-Based Pricing
•
Competition-Based Pricing
Source: Kotler.P & Armstrong.G (2001) Principles of Marketing 9th ed, USA:Prentice Hall
New-Product Pricing Strategies
• Market-Skimming Pricing:
setting a high price for a new product to skim maximum
revenues
• Market-Penetration Pricing:
setting a low price for a new product in order to attract a
large number of buyers and a large market share
Source: Kotler.P & Armstrong.G (2001) Principles of Marketing 9th ed, USA:Prentice Hall
Price-Adjustment Strategies
STRATEGY
DESCRIPTION
Discount & allowance
pricing
Reducing prices to reward customer responses such as
paying early or promoting the product
Segmented pricing
Adjusting prices to allow for differences in customers,
products or locations
Psychological pricing
Adjusting prices for psychological effect
Promotional pricing
Temporarily reducing prices to increase short-run sales
Geographical pricing
Adjusting prices to account for the geographical
location of customers
International pricing
Adjusting prices for international markets
Source: Kotler.P & Armstrong.G (2001) Principles of Marketing 9th ed, USA:Prentice Hall
Place
Channel Structure for Consumer
Goods
PRODUCER
Agent
Retailer
Wholesaler
Wholesaler
Retailer
Retailer
CONSUMER
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Channel Structure for
Organisational Markets
MANUFACTURER
Agent
Distributor
Agent
Distributor
USER
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Sorting activities conducted by
channel members
Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin
Value Added Services Provided by
Intermediaries
Value Added Services
Facilitating Value
Transactional Value
-Financing
-Training
-Information
-After sales
-Risk
-Marketing
-Administration
Logistical Value
-Assortment
-Storage
-Sorting
-Bulk breaking
-Transportation
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Promotion
Advertising
“Any paid form of non-personal
communication of ideas, goods or services
delivered through selected media channels.”
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Sales Promotion
Institute of Sales Promotions definition:
“A range of tactical marketing techniques
designed within a strategic marketing
framework, to add value to a product or
service in order to achieve a specific sales
and marketing objective.”
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Public Relations
Institute of Public Relations definition:
“Public relations is the deliberate, planned and
sustained effort to establish and maintain
mutual understanding between an
organisation and its publics.”
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Selling & Sales Management
“A sales force provides the personal interface
between a company and its customers. This
contact may be face-to-face, telephone or
utilising information technology.”
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Direct Marketing
UK Direct Marketing Association defines direct
marketing as:
“Communications where data are used
systematically to achieve quantifiable marketing
objectives and where direct contact is invited or
made between a company and its customers.”
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Promotional Mix
Public Relations
Sales Promotion
Advertising
Personal Selling
Capital Equipment
Organisational
Home Improvements
Raw Materials
White Goods
Consumables/Stationery
Consumer
fmcg
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Physical Evidence
Physical Presence / Evidence
Shostack (1997) identifies two types of
physical evidence:
1. Essential Evidence
2. Peripheral Evidence
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Essential Evidence
Central to the service and is an
important contributor to the customer’s
purchase decision,
For example, the car fleet belonging to a
car hire firm.
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Peripheral Evidence
Less central to the service delivery and
is likely to consist of items that the
customer can keep or use.
Source: Brassington,F. & Pettitt,S. (2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
People
People
The nature of most services requires direct
interaction between the customer/consumer
and personnel representing the service
provider’s organisation.”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies
US:Houghton Mifflin
Service Organisations
“In many services, customers interact with
one another, and the organisation’s staff also
interact with one another…Employee
selection, training and motivation are central
considerations.”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies US:Houghton
Mifflin
Dependency of Personnel
“Many services businesses are totally
dependent on their personnel, as Leo
Burnett, founder of the international
advertising agency that bears his name,
summed up: “Every evening all our assets go
down the elevator” – people!”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies
US:Houghton Mifflin
Service Marketing Effectiveness
Service marketing effectiveness is likely to be
critically affected by the actions of front-line
employees who interact with customers.
Source: Palmer, A (2000) Principles of Marketing UK:Oxford
Process
Purchasing & Consumption
“The acts of purchasing and consumption are
important in all markets – consumer,
industrial or service.”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies US:Houghton Mifflin
Direct Involvement
“The direct involvement of
customers/consumers in the production of
most services and the perishability of these
services place greater emphasis on the
process of the transaction for services.”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies US:Houghton Mifflin
Aspects of Process
“Friendliness of staff and the flows of
information affect the customer’s perception
of the service product offer. Appointment or
queuing systems become part of the service.
Ease or difficulty of payment can enhance or
spoil the consumption of the service.”
Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrell.O.C. (2001) Marketing – Concepts & Strategies US:Houghton Mifflin