Transcript Product
Chapter 6,7,8,9 Summary Musaed Al-Mahfouz 200901354 Muhannad Al-Mathami 200800809 Nasser Al-Anizan 200700264 PRINCIPLES OF MARKETING Section : 102 Dr. Richard Maguire Table of Content Introduction Business Market and Business Buyer Behavior (Ch.6) Customers-Driven Marketing Strategy (Ch.7) Products, Services, and Brands (Ch.8) New Product Development (Ch.9) Conclusion Introduction What is Marketing? Business Market and Business Buyer Behavior (Ch.6) What is a Business Market? Characteristics of Business Markets Market Structure and Demand: 1. Fewer, larger buyers 2. Geographically concentrated 3. Demand derived from consumers 4. Inelastic demand 5. Fluctuating demand Cont. Nature of the Buying Unit 1. More buyers 2. More professional purchasing effort Types of Decisions & the Decision Process More complex decisions Process is more formalized Buyer and seller are more dependent on each other Build close long-term relationships with customers Cont. - Major Influences on Business Buying Environmental Economic, Technological, Political, Competitive & Cultural Organizational Objectives, Policies, Procedures, Structure, & Systems Interpersonal Authority, Status, Empathy &Persuasiveness Individual Age, Education, Job Position, Personality & Risk Attitudes Cont. Stages in the Business Buying Process: 1. Problem Recognition 2. General Need Description 3. Product Specification 4. Supplier Search 5. Proposal Solicitation 6. Supplier Selection Customers-Driven Marketing Strategy (Ch.7) Designing a true customer-driven marketing strategy involves: 1.Segmentation 2.Targeting 3.Differentiation 4.Positioning Market Segmentation: Segmentation: Dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes. Cont. Key variables: Geographic: States, Counties Demographic: Age, gender Psychographic: Dividing a market into different groups based on social class. Behavioral: Dividing buyers into groups based on consumer knowledge, attitudes, uses Benefits sought: Different segments desire different benefits from products. Cont. User status: Nonusers, ex-users, potential users, first-time users, regular users. Usage rate: Light, medium, heavy. Loyalty status: Brands, stores, companies. Business marketers can also use: 1. Operating characteristics. 2. Purchasing approaches. 3. Situational factors. 4. Personal characteristics. Requirements for Effective Segmentation: To be useful, market segments must be: Measurable, Accessible, Substantial, Differentiable, Actionable Micromarketing 1. Local marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores. 2. Individual marketing: Tailoring products and marketing programs to the needs and preferences of individual customers. Products, Services, and Brands (Ch.8) What Is a Product? - The most basic level of a product is called core benefit 1) Consumer products: - Consumer products are products and services for personal consumption 1. Convenience products 2. Shopping products 3. Specialty product 4. Unsought products Cont. 2) Industrial products: are products purchased for further processing or for use in conducting a business Classified by the purpose for which the product is purchased: Materials and parts, Capital, Raw materials Product and Service Decisions Product attributes are the benefits of the product or service: Quality, Features, Style and design. Product quality includes level and consistency: Quality level is the level of quality that supports the product’s positioning. Cont. Desirable qualities: 1. Suggest benefits and qualities. 2. Easy to pronounce, recognize, and remember. 3. Distinctive. 4. Extendable. Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction. Internal marketing must precede external marketing. Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter, like Service quality. Cont. Managing service: Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors. Managing service productivity refers to the cost side of marketing strategies for service firms, Employee recruiting, hiring, and training strategies, Service quantity and quality strategies. New Product Development (Ch.9) New Product Development: Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts. New Product Development Strategy: New products can be obtained via acquisition or development; new products suffer from high failure rates, several reasons account for failure. Cont. Major Stages in New-Product Development: Stage 1: Idea Generation Internal idea sources: R & D External idea sources: Customers, competitors, distributors, suppliers. Stage 2: Idea Screening Product development costs increase dramatically in later stages. Ideas are evaluated against criteria; most are eliminated. Stage 3: Concept Development and Testing Product concepts provide detailed versions of new product ideas. Consumers evaluate ideas in concept tests. Cont. Stage 4: Marketing Strategy Development Strategy statements describe: The target market, product positioning, and sales, share, and profit goals for the first few years. Product price, distribution, and marketing budget for the first year. Stage 5: Business Analysis: Sales, cost, and profit projections Stage 6: Product Development: Prototype development and Stage 7: Test Marketing: Standard test markets, Controlled test markets, simulated test markets Stage 8: Commercialization. Product’s Life Cont. Product Life-Cycle PLC Stages 1-Product development: Begins when the company develops a new-product idea, sales are zero, Investment costs are high, and profits are negative. 2-Introduction: Low sales, High cost per customer acquired, Negative profits, Innovators are targeted, little competition. And for Introduction Stage: Product – Offer a basic product, Price – Use cost-plus basis to set, Distribution – Build selective distribution, advertising – Build awareness among early adopters and dealers/resellers, Sales Promotion – Heavy expenditures to create trial. Cont. 3- Growth: Rapidly rising sales, Average cost per customer, Rising profits, Early adopters are targeted, Growing competition. And for Growth Stage: Product – Offer product extensions, service, warranty, Price – Penetration pricing, Distribution – Build intensive distribution, Advertising – Build awareness and interest in the mass market, Sales Promotion – Reduce expenditures to take advantage of consumer demand. 4-Maturity: Sales peak, Low cost per customer, High profits, Middle majority are targeted, Competition begins to decline. And for Maturity Stage: Product – Diversify brand and models Price – Set to match or beat competition, Distribution – Build more intensive distribution, Advertising – Stress brand differences and benefits, Sales Promotion – Increase to encourage brand switching. 5-Decline: Declining sales, Low cost per customer, declining profits, and laggards are targeted, declining competition. And for Decline Stage: Product – Phase out weak items, Price – Cut price, Distribution – Use selective distribution: phase out unprofitable outlets, Advertising – Reduce to level needed to retain hard-core loyalists, Sales Promotion – Reduce to minimal level. Conclusion Thank You For Listening Any Questions ?