Transcript Marketing 1 - WordPress.com

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Marketing 1
Starter – best marketing
campaigns of all time
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http://blog.hubspot.com/blog/tabid/6307/bid/3
2763/The-10-Greatest-MarketingCampaigns-of-AllTime.aspx#sm.00000cw0y5xh7gcyeq3basyb
c6x6x
But marketing is not just about
promotion….
Its all of this and more….
Marketing is about identifying what consumer needs
are and then satisfying those needs
It is not the same as selling
It starts before the product or service is developed
It is about producing goods/services to satisfy
consumer needs, but at a profit
Chapter topics
1.
2.
3.
4.
5.
6.
7.
8.
What is a marketing strategy?
How can a business identify its target market?
What is the marketing mix?
In the marketing mix, what is meant by product?
How should a product be designed?
What is meant by branding?
What pricing strategies should a firm follow?
What is a break even analysis?
1. What is a marketing strategy?
A marketing strategy
“Is a plan of setting out how a business
achieves its marketing objectives”
This can be done through a combination of
identifying its target market, developing its
product and the actual tactic of selling.
2. How can a business identify its
target market?
They can identify a target market through
detailed market research into customers
available to the business.
Market segmentation can now be used to
divide these potential customers into groups.
Groups are picked according to age, race,
sex, job, income, interests etc.
Back to you
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What kind of companies would target YOU?
Give as many examples as you can
Name 5 well known companies (different
industries)
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How would they segment their market?
The most common way of identifying a market
would be through
a)
DEMOGRAPHIC SEGMENTATION – This
categorises age, income, sex, status.
(Lucozade Sport geared towards sports
people)
b) PSYCHOLOGICAL SEGMENTATION – this
identifies potential customers on the basis
tastes, attitude.
(Baileys Crème Liquor drinks is focused on
sophisticated females)
What is a market niche?
A market niche is a specific gap in the market for a
particular product or service?
What is a target market?
This is a particular customer group that
product/service is aimed at.
(ADIDAS - Predator boot geared towards football
players)
Product
Place
3 .MARKETING
MIX
Promotion
Price
The 4 P’s of Marketing explained
Product
1. Is there a
demand for
the product or
service?
2. How to make
the product
appeal to
consumer
3. Packaging—
includes the
design, color,
size, and
brand names
Promotion
1. Making
customers
aware of a
product
2. Advertising
3. Coupons
4. Rebates
5. Sales
6. Free give
aways
7. Publicity
Place
Price
1. Distribution is
getting the
right product
to the right
place at the
right time in
the right
amount and in
the right
condition
2. Storage
3. Warehousing
4. Transporting
1. How much are
customers
willing to pay?
2. Is the price
competitive
with other
products?
3. Can the
company
make a profit?
1. PRODUCT
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1.
2.
3.
Product – what customers want, must have a USP
(UNIQUE SELLING POINT) e.g. Coca- cola and its
taste compared to other brands. I Touch (New ipod
by apple)
BRANDING is important – Why?
Product is easily recognised on shelf
Loyal customers – only buy the brand
Can Charge a higher price to customers
Branding Continuied - Importance
4. Conveys a particular image e.g Juicy Couture, Mac,
Gucci
5. Helps the company introduce new products more
easily
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1.
2.
3.
4.
Packaging of the product is also key, What are the
functions of Packaging?
To protect the product
Presentation
Information about the product
Easily Identifiable
Product Continuied
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The Product Life Cycle
Patent - Legal Protection for a product/ service
invented and it prevents it from being copied.
Expensive to register
Patent holders can licence out their product if they
want an charge fees known as royalties.
Trademark is protection
for your business name or something that represents
your product/service through a slogan, logo or catch
phrase
Examples??
PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE
Introduction
Launch
Awareness/sales low
Marketing campaign
Pricing strategy
Loss making
Manage cash flow
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PRODUCT LIFE CYCLE
Growth
Advertising starts to take affect
Sales rise sharply
Convincing consumers
Lower marketing costs = profit
Overtrading can happen here
 Maturity/Saturation
Rate of sales begins to slow
Sales level off. Repeat order stage
Develop new products
Competitive promotion begins!
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PRODUCT LIFE CYCLE
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Decline
The product has outlived the market demand
Sales drop
Strategies needed to change decline
Development of new product
Changes to product
Product Harvesting = cut advertising max profits
Extension Startegies
Product Development Strategies
Modify revamp existing prdt
EG: Washing Powder….powder to liquids to tablets, nonbio to concentrated etc
 Market Strategies
Find new markets
Market Segmentation (Target Market subdivided eg: Coca
cola)
EG: Tobacco Industry market heavily in developing
countries to counteract declining sales in US & Europe
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2.PRICE:
PRICE
Price will be determined from the findings of your market
research
Target market will determine how much can be charged
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Pricing Strategies (hl question) NB
 Cost Plus Pricing – Cost add a mark up for
profit e,g COST €100 ADD 20% PROFIT –
Selling price €120
 Loss Leader/Below-Cost– Sell a product at a
loss e.g. supermarkets often do this – in the
hope that you carry out your weekly shopping
there and become loyal to the store.
Pricing strategies continued
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Loss Leader eg.Phone companies do the
same - €30 – sign a contract for 18
months. Phone is sold at a loss but money
is made on the phone uses calls and texts.
Seasonal Pricing when demand increases
e.g hotels during gaa matches, airlines
during school holidays – The price
increases. Also known as Price
Discrimination/Peak load pricing
Pricing strategies continued
Predatory Pricing
Companies deliberately charge exceptionally low
prices to drive competitors out of the market
 Premium Pricing – Charging exceptionally high
prices to convey to customers that the product is
high in quality and luxurious –e.g Designer
Brands – Gucci, Louis Vuitton etc.
 Penetration Pricing – Initially low price to build
up market share eg: Magazines
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Factors that determine price
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Cost of production
Demand for product
Price strategy
Competitors Prices
Stage in the Product Life Cycle
3.Place
The place describes how the product gets from the
manufacturer to the consumer.
It is crucial as if the product does not reach the target
consumer than it will fail
Various Channels of Distribution are used such as:
Producer
Wholesalers Retailer
Cons
Producer Retailer
Consumer
Producer Consumer
Place continued
Note: Some larger retailers such as Tesco and
Dunnes buy directly from the manufacturer, by
passing the wholesaler.
Other manufacturers sell directly to the retailer e.g.
Dell, Aer Lingus, Ryanair
4. Promotion
1.Sales Promotion
Where they use merchandising and direct marketing
Merchandising is displaying products in the best possible
way to encourage consumers to buy more e.g. attractive
window displays, signage in a store, promotional banner
or display cabinet, having products displayed at the till
e.g, Cadbury’s, Coca Cola
Direct Marketing – making contact with customers via
phone calls.
Promotion
2. Advertising
Tv, Radio, Newspapers, Magazines
3.Public Relations (pr)
 Getting positive stories/ images in to the papers about
the product
 A Public Relations Officer is responsible for dealing with
the media
 Product placement – e.g. Apple laptop in films
 Types of PR : websites/conference/press
release/sponsorship/corporate ID
 Benefits : Image
Promotion cont..
4. Selling
 Personal selling (door to door)
 Telemarketing (over phone)
 Internet, Catalogues
EXAM QUESTION
What are the factors to be considered before deciding
on Price of a new product? (20 marks)
 Costs – production costs, wages, purchasing etc..
 Demand
 Price Strategy
 Govt taxes, levies
 Consumers – target market and disposable income
Advertising: Is making contact with
target market
2001 List 3 function of advertising
1.Promotes the product/ service
2. Increases demand from customers,
increases sales and profits
3. Remind customers of the product – ensures
stay loyal
4. Persuade Customers to buy the product
4. In the marketing mix, what is
meant by product?
A product is a good/service that is developed to
satisfy customer needs.
The following is a diagram of a product life
cycle. This shows the various stages a
product goes through.
What is product portfolio?
This is where a business has a range of
products that are available to be sold. If a
business is to reliant on one particular product
it will reach the decline stage and then come
into difficulties.
EXAMPLES OF PRODUCT PORTFOLIO’S
BUDWEISER- Bud Light
BULMERS CIDER- Bulmer's Pear Cider
PEPSI – Diet Pepsi- Pepsi Max
ADIDAS- 6 stud football boot
- multi stud boot
- predator boot
- blades
VOLKSWAGEN – Beatle
- Pass at
- Golf
- Bora
5. How should a product be designed?
The design of the product should address
1.
After sales service – this recognises that
customer may need knowledge on the particular
good/service after the time of sale.
Example – Toyota offer a 3 year guarantee on every
new car sold.
2. Packaging – The product purchased must protect
the goods from any handling damage, tampering
damage etc. It should be designed for easy
storage and display and where appropriate with
bar code for ease of scanning.
3. Aesthetics – this deals with how the product
looks, smells, tastes, sounds. The product
should appeal to the customer needs. This
will greatly affect the influence of a sale. Eye
catching designs live long in the memory of
shoppers.
4. Social Responsibility – This deals with the impacts
of the product on the various stakeholders. Green
products TRY to minimise their impact on the natural
environment. Over the past 10 years in this country
there has been a improved awareness amongst
stakeholders to be eco – friendly. Certain eco-friendly
businesses are gaining a loyal customer base on the
basis of their greener attitude towards product
development, packaging, transport, disposal etc.
EXAMPLE
= use of biodegradable bags instead of plastic
= recycling of paper, bottles
6. What is meant by branding?
Branding means
“creating an identity for a product that clearly
distinguishes it from the competition”
EXAMPLES – Pepsi, Nike, Levi's, Mercedes.
A brand leader is the brand with the biggest share of
a particular market.
EXAMPLES –
Lyons tea – largest in Irish tea market
Goodfella’s pizza – leader in Irish pizza market
What are own label brands?
“Own label” brands are sold by the larger
retailers with the retailers own name/own
brand on them. They are goods that are
usually sold at a lower price than leading
brands.
Example –
Homestead, Euro shopper, St Bernard
What does GI (guaranteed Irish) symbol on
packaging mean?
This GI symbol is used to make goods that are
manufactured in Ireland easily identifiable to
Irish consumers.
Its main purpose is to encourage Irish
customers to buy Irish products
7.What pricing strategies should
a firm follow?
There are a number of pricing strategies used
by businesses.
MARK UP: this means adding a standard
percentage to the direct cost of the product.
The mark up helps to pay for the overheads
of running the business with a profit to also
be added.
Example: Buy at £10, Sell at £14 – 40% mark up
High price strategies
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Price leadership – Firms can deliberately
charge a higher price to create an impression
of superiority.
Price skimming – this is done in the launch
stage. Company will increase the price of a
product to cover development costs.
Profit maximising pricing – setting a high
price to deliberately make as much profit as
soon as possible.
Psychological Pricing – This means setting
a price based on customer expectations.
Low price strategies
Penetration Pricing – a business sets a low price
to push other companies out of the market. They
are looking for largest market share from an early
stage.
Discriminatory Pricing – different prices are
charged to different groupings for the same
product. This is to do with age, status etc.
Example – Bus Eireann charge students less than
the full time employees.
Predatory pricing- This is where a company
will greatly reduce prices in order to push
competitors out.
Example – Aer Lingus adopted this approach
with Ryanair on the cheaper flights route
Price War – this is where competing firms
continously cut prices to retaliate against rival
firms. Customer benefits greatly if this
situation continues for a long period of time
Loss Leader – This is a where a business that
sets a particularly low price on products can
greatly benefit from the bond developed. This
improves the chances of future repeat
purchases and the business will profit as a
result.
8. What is Break Even Analysis
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