Transcript Marketing - Mr. G.`s Room

October 8, 2014
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Marketing: All the activities involved in
getting goods and services from the businesses
that produce them to the consumers who wish
to purchase them.
Two roles of marketing:
1.
2.
Sell what a business makes
Manage a business’s brand
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A brand name is a word or a group of words
that a business uses to distinguish its products
from competitors’ products.
Many products combine their name with a
special symbol that is associated with the
product. This symbol is called a logo or
trademark.
A slogan is a short, catchy phrase that is
usually attached to the company’s name and
logo.
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Logos take 5 possible forms
Word Mark (Coca-Cola)
2. Letter Mark (IBM)
3. Combination Mark (Adidas)
4. Symbol or Icon (Apple)
5. Emblem (Harley Davidson)
1.
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Once a company develops a name, slogan, or
logo for a product, everything else associated
with that product should carry the
identification.
Logo Recognition
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See how many logos you can identify from this
alphabetical list.
 http://www.joeykatzen.com/alpha/ver5/
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Slogan Recognition
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How many slogans do you recognize from the list
handed out?
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The best marketing can be measured
in two ways:
1.
2.
Sales analysis
Consumer reaction to the brand – a
reaction based on marketing efforts.
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Effective marketing increases brand equity: the
value of the brand in the marketplace.
Good marketing develops brand awareness;
customers can name your brand as part of a
specific category, whether it is a product,
service, non-profit organization, or event.
Better marketing develops brand loyalty.
The best marketing is marketing that develops
brand insistence: the customer will accept no
substitutes.
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Product life cycle: the changes in a product’s
popularity over time.
Style curve: graphic representation of a
product’s success in the market, illustrating the
volume of sales over time.
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5 Stages
Product Introduction (or launch)
 Growth
 Maturity
 Decline
 Decision Point
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At this stage, consumers don’t know the
product exists.
Business needs to inform consumers about the
product’s features, availability, package design,
and brand identification.
Usually, curious or adventurous buy the
product first. These consumers are called early
adopters.
Other consumers look to early adopters, or
trendsetters for information.
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In this stage, marketers manage their products
very carefully.
As popularity increases, competitors enter the
market.
These competitors modify original product by
adding features and improving quality, or sell
at a lower price.
Competition fuels growth.
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Consumers want to know what all the fuss is about.
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At this stage, growth is flat.
New consumers replace those who leave to
purchase a competing product.
Marketers manage mature products through
continued advertising.
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Reminding consumers of the benefits. (ex. Coca-Cola,
Tide)
By now, manufacturers have long since paid for
major production costs. Cost of sales and
distribution are low.
These products are very profitable, known as cash
cows.
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At some point, most products fail to attract
new customers.
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Sales decrease and product enters stage of decline.
Seasonal changes or new competition may
cause temporary decline.
If decline continues, businesses research their
markets to determine if consumers are rejecting
their brand.
Price change or ad campaign may help this.
If brand equity drops, that’s a problem.
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Final stage of product life cycle.
Decision must be made
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Do we reposition? Try to make it popular in a new
market.
“New and improved!”
New promotion and pricing?
If campaign succeeds, company may retain
sales numbers and brand equity.
If not, product may be removed from market.
New technologies may render products
obsolete. Marketing will not help.
Fads
Niches
Seasonal
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Fad: a product that is extremely popular for a
very short period of time.
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Ex. Pogs, Tamagatchi, Atkins Diet
Imitation products at a cheaper price are called
knock-off products.
Fad marketers enter late and stay too long.
When fads die, they die fast, leaving many
businesses with large inventory and no buyers.
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Niche: a section of the market in which a
product dominates and into which few
competitors enter; a place or position
particularly suitable to the person or thing.
By the time competitors develop, original
producer has already distributed to those that
want to purchase.
Not always the most profitable because of
factors called barriers to entry.
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Barriers to entering a niche market:
Small market size
 Cost of R&D
 Advertising expense
 Factory and equipment cost
 Design costs
 Lack of distribution channels
 Cost of raw materials
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High barriers to entry usually means
competitors do not enter market.
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Seasonal
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Try to sell a snow shovel in August.
Patio furniture in December
Many products are only popular during a
certain time of year.
With new seasons comes new styles
Manufacturers must make the most of their
selling season.
Too much inventory is bad!

The balancing of product quantity with sales is
called inventory management.
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The Four Ps of Marketing
Product
 Price
 Place
 Promotion
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The Two Cs of Marketing
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Competitive Markets
Consumer Markets
Businesses develop products for two reasons:
1.
They can
2.
There is a need
Product and service development take into account:
 Quality
 Design
 Features
 Benefits
 Service & Support
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How good is the product?
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Does it do what it is supposed to do?
Does it do this better than competing brands?
Will it last long?
Consumers will pay for higher quality
Some products are developed to lower
standards.
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Can we meet the consumer needs with a lower
quality product?
These products will be less expensive
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How things look.
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Clothing
Cars
Coke bottle
Packaging also may protect products from
tampering, dirt, air, etc.
Businesses want consumers to recognize and
look for their product design.
What about service design?
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Producers consider features such as materials,
size, scent, taste, etc.
Service providers also focus on features
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As a car rental company, will you pick up your
clients?
How long does Apple allow you to rent movies?
What style of music does the DJ play?
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We are not buying products, we are buying
benefits.
When you buy a car, you are actually buying
transportation.
 When you buy food, you are actually buying
nutrition.
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Consumers must perceive there to be a benefit
for them to actually make the purchase.
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Retail stores do not just sell products
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Delivery
Installation
Warranties
Alterations
Free parking
Every extra service or support offered gives
consumers another reason to select that store
over another
Service businesses also sell products.
Finding the right mix is important.
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Businesses must decide at what price to sell
products.
Lower prices may encourage more sale, but
may not be worth it (remember equilibrium).
Some products are more price sensitive than
others: how much sales will go up or down
when the price goes up or down.
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Channels of Distribution: the paths of
ownership that goods follow as they pass from
the producer to the consumer.
Direct Channels
 Indirect Channels
 Specialty Channels
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Also known ad distribution chain.
A product does not change in a distribution
chain.
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If it does change, a new distribution chain begins.
Place (Channels of Distribution)
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Direct channels of distribution: A direct
connection between the consumer and the
producer of a good or service; also known as a
maker-user relationship
Does not use intermediaries: businesses that
take possession of the goods before the
consumer does.
Consumers feel more confident because they
know the actual source of the product they are
buying.
Place (Channels of Distribution)
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Indirect channels of distribution: have one or
more intermediaries. These intermediaries can
be importers, wholesalers or retailers.
Importers: someone who seeks out foreign
products to bring into his or her own country
Wholesalers: buy goods from producers or
importers and resell the goods to retailers.
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Wholesalers buy in volume. Located close to retailers
and have large storage space.
Retailers: buys goods from wholesaler and
sells to consumers.
Place (Channels of Distribution)
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Specialty channels of distribution: any
indirect channel of distribution that does not
involve a retail store.
Vending machines
 E-commerce
 Door to door sales
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Promotion is any attempt to sell a product.
Sales promotion encourages consumers to buy
a product by using coupons, contests,
premiums, samples and special events.
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Coupons offer consumers money off the price
of a product. They are treated as cash at the
checkout counter.
Advertisers measure effectiveness of a coupon
promotion by the redemption rate: the
percentage of coupons that consumers actually
use.
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Average redemption rate is 5%. In general, the larger
the value of the coupon, the higher the redemption
rate.
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Contests are an exciting way to increase brand
recognition and sales.
By law, businesses must organize contests so
that anyone can enter (“no purchase
necessary”)
Laws prohibit gambling in contests. Contests
require people top either demonstrate a skill or
answer a skill testing question.
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Rolling up the rim passes as demonstrating a skill
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Premiums are giveaways – something a
consumer gets for free with the purchase of a
product.
Many businesses encourage brand loyalty by
giving away free products to regular
customers.
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Consumer loyalty cards: a card that is stamped each
time a consumer buys the business’ product. This
ensures sales.
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Samples encourage a brand trial.
Usually a smaller “trial” size.
Samples can be delivered door to door, at point
of sale, busy street corners, etc.
Price and other product information will be
provided.
Very effective. Usually increases sales. But
costs are very high.
WORD OF MOUTH
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Marketers organize special events to attract
customers and increase product sales.
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Book signings, celebrity appearances, free concerts,
etc.
Often include other types of promotions such
as contests, premiums and samples.
Main purpose is to excite consumers.
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Consumers will buy more if they are having fun.
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Students will break into 5 small groups.
Each group will be assigned a type of promotion
1.
2.
3.
4.
5.
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Coupons
Contests
Premiums
Samples
Special Events
Groups will find a company employing their type
of promotion and do some research
Each group will present the details of their
promotion (what is actually being done) and
decide whether they think it is a good promotion
(Will it increase sales? Am I more likely to buy?).
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The two major external factors in marketing:
the competition and the consumer.
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The competitive market consists of all the
sellers of a specific product, and is expressed
most often in terms of the total dollars spent
annually on this product.
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Ex. The American soft drink industry is worth $68
billion. This means all manufacturers, bottlers,
importers, and distributors share that $68 billion.
The percentage of the market that a company or
brand has is called market share.
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A market segment is a part of the overall
market that has similar characteristics.
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Ex. Soft drink market segments
 Root beer
 Cola
 Energy drinks
 Etc
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Ways to increase market share
1.
2.
Increase size of overall market
Taking sales from a competitor
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Competition among Products
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Direct competition: competition between products or
service that are very similar.
 Coke v. Pepsi
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Indirect competition: competition between products or
services that are not directly related to each other.
 Pizza v. Concert tickets
Discretionary income: income you have that is not
committed to paying for the basic necessities, such as
food, clothing and shelter.
 Disposable income: income used to pay for basic
necessities. It is the amount of income left over after taxes
have been paid.
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This activity can be found on under the BBI
section of
www.welcometomrgsroom.weebly.com
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The two major external factors in marketing:
the competition and the consumer.
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Consumer market: all the potential users of a
product or service.
Can be identified in at least two ways:
Demographics
2. Lifestyle
1.
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Demographics is the study of obvious
characteristics that categorize human beings.
Age
 Gender
 Family Life Cycle
 Income Level
 Ethnicity and Culture
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Young children want toys, teens want computers,
adults might be more interested in cars, seniors
may want items to do with retirement.
Some age groups are consumers but not
customers.
Consumers: people who use goods and services.
 Customers: people who purchase goods and service.
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Businesses often target the gatekeeper: the person
who makes the buying decisions for a household.
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Cereal companies will target parents by stating the health
benefits for their children.
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Certain products are targeted at all genders,
some to specific gender.
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Women’s athletic shoes targeted at women.
Shopping roles have changed.
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Power tools are not always targeted at men
anymore.
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Newly married or cohabitating couples need
furniture.
Parents of babies need diapers, crib, car seat.
Your stage in the family life cycle often
determines what you want and need
Businesses are aware of this demographic and
compete for consumer $ in different ways for
various groups.
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How much money you make.
Kellogg’s Corn Flakes are targeted at everyone.
Mercedes are targeted at those with more
wealth.
To determine marketing efforts, businesses
may look for postal codes of upper-class
neighbourhoods. They may advertise in Forbes
Magazine.
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Canada has a very diverse population.
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Look around this class!
Businesses compete for various groups by
importing products from their home countries.
There are newspapers and magazines available
in more than 100 languages
Many companies attracted business from
specific groups, then competed for all groups.
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Non-Italians at Italian restaurants.
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Lifestyle: the way people live, including their
values, beliefs, and motivations.
The study of lifestyles is called
psychographics.
A person’s beliefs will influence their decision
making.
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Vegans will not purchase steak.
A lazy person will not be interested in buying
running shoes.
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What are the four Ps of marketing?
Provide an example of each:
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Slogan
Family life cycle
Premium
Specialty channel of distribution
Product/service mix
What are the two Cs of marketing?
Define and give an example of market share.
Explain two possible ways in which a business
could increase its market share.
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Advertising is the paid use of various types of
media to try to convince consumers to buy a
particular product.
TV
 Newspaper
 Internet
 Radio
 Etc.
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No one really knows… there is no magic
formula for genius.
Advertisers want consumers to remember the
brand and the name of the product.
Even if an ad is artistic or funny, if we do not
remember the product or brand, the ad has not
done its job.
There are four standard rules for creating good
advertising:
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Attract attention, gain interest, build desire, get
action.
https://www.youtube.com/watch?v=HPR3PB_VGVs
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Attract Attention
For print – a good headline
 TV or Radio – hold your attention for 30 seconds
when the fridge or bathroom beckon
 Internet – get you to click
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Gain interest
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Print should be simple and easy to read
TV and radio should be easy to understand
Make people want to read or watch or listen
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Build desire
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Help the customer want your product
Describe benefits – Snicker: Hungry? Why wait?
Get Action
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Ask for the sale!
Summarize reasons to buy
Make it easy for customers to buy, especially online
TV or radio – repeat phone numbers or website
Print – In North America, most important
information starts to left
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Remember that advertising is the paid use of
various types of media to try to convince
consumers to buy a particular product.
Publicity is information about a business,
either positive or negative, that appears in the
media and is not paid for.
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More trusted than advertising
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Direct to home
Out of home
Radio
Television
Newspaper
Magazine
Internet
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Reach - # of people exposed
Frequency - # of times audience will see or hear
Selectivity – ability for the medium to focus on
target audience
Durability – how long ad lasts (ie. Radio is 30
seconds, newspaper is 1 day)
Lead time – how fast the ad can be ready to run
Mechanical requirements – how complex it is to
create ad
Clutter – competition for the audience’s attention
Cost – accumulated costs of running the ad
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What are the two most selective media?
Explain why.
List five types of advertising.
What are the four standard rules for
marketing?
Why does out-of-home advertising have a
reach score of 10?
Describe an advertisement you think is good.
Why do you think that?
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Marketing Research is the collection and analysis
of information that is relevant to the marketing
strategy.
Types of marketing research:
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Consumer research – what do consumers want?
Market research – what groups are interested?
Motivation research – how we think and feel about
buying?
Pricing research – what price to sell at? How does price
change demand?
Competitive research – look for areas of weak
competition. What is the competition doing?
Product research – examines detail of product and how
these impact the market
Advertising research – what is the most effective way to
reach potential consumers?
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Secondary data: information that others have
collected and researches re-interpret for their own
purposes.
Primary data: current information that researchers
collect and analyze for a specific purpose.
Test marketing – limited release to test interest
Internal Information sources – analyze your own sales
records, inventory, advertising and sales to predict future
consumer behavior. Also called data mining.
 Surveys – carefully planned questions used to gather
data.
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 Open-ended & close ended questions
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Observation – researches watch consumers behaviour
Focus groups – a company arranged meeting of potential
consumers