Transcript
ADVANCED ADVERTISING Marketing
WHAT EXACTLY IS “MARKETING”?
MARKETING
Marketing consists of the strategies and
tactics, used to identify, create and maintain
satisfying relationships with customers that
result in value for both the customer and the
marketer.
DISSECTING THE DEFINITION
Strategies and tactics
Strategies – the direction marketing efforts take over a period of time
Tactics – actionable steps or decisions made to follow the strategies
Satisfying relationships – Provide products and services that customers want and make the customers feel that they are partner in the transaction, rather than just a source of revenue.
Identify, create and maintain – Identify the customers, create avenues to build relationship with customers, and take steps to keep customers satisfied and happy.
Value for both customer and marketer – both the customer and marketer gain benefit, not necessarily monetary.
ROLE OF MARKETING
Developing products that satisfy needs and enhance society’s quality of life.
Creating a competitive environment that helps lower product prices.
Developing product distribution system to provide product to a large number of customers and many geographic locations
Building demand for products that require organizations to expand labor force
MARKETING MIX
A planned mix of the controllable elements of the product’s marketing plan.
They are adjusted until the right combination of the elements is found to serve the needs of the consumer and generating income for the organization
ELEMENTS OF THE MARKETING MIX
Marketing mix
Place
Promotion
Price
Product
PRODUCT
The actual goods or services made for consumers according to their needs and requirements.
Supporting elements like warranties and guarantees are also included in Product.
Every product goes through a cycle called product life cycle. At each stage different strategies are used.
PRODUCT LIFE CYCLE
Introduction WithdrawlDecline MaturityGrowth
PLC - INTRODUCTION
The product is introduced in the market.
No pressure of immediate profit.
Awareness for product is created.
Generally no competitors at this stage.
PLC - GROWTH
Competitors enter the market with similar products.
Products become profitable.
Advertising spend is high.
Companies focus on brand building
Market share tends to stabilize.
PLC - MATURITY
Sales grow at a decreasing rate and then stabilize.
Companies attempt to differentiate products using branding.
Price wars and intense competition occurs. Market becomes saturated. Some producers leave the market due to
small profit margins. Promotion is widespread and media usage is
high.
PLC - DECLINE
More innovative products have entered the market.
Consumers tastes have changed.
Intense price –cutting
Marketing spend is decreased.
PLC - WITHDRAWL
Products are finally removed from the market, producers move on to other businesses.
ELEMENTS OF THE MARKETING MIX
Marketing mix
Place
Promotion
Product
Price
PRICE
The process of setting a price for a product,
including all kinds of incurred costs like production cost,
manufacturing cost, storage cost, discounts to
be offered etc.
PRICING STRATEGIES
Four basic strategies
Premium pricing
Penetration Pricing
Economy Pricing
Price Skimming
PREMIUM PRICING
Use a higher price where there is a uniqueness about the product or service.
Used when a substantial competitive advantage exists.
Such prices are charged for luxuries.
PENETRATION PRICING
The price charged for products and services is set artificially low in order to gain market share.
Once it is achieved , the price is increased.
E.g. Habeeb masala used low introductory prices .
ECONOMY PRICING
A no frills low price.
The cost of manufacturing and marketing are kept at a minimum.
PRICE SKIMMING
Charge a high price because you have a substantial competitive advantage.
This high price tends to attract new competitors into the market.
As a result price of the product falls due to increased prices
E.g telecom services
OTHER PRICING STRATEGIES
Psychological pricing Product line pricing Optional product pricing Captive product pricing Product bundle pricing Promotional pricing Geographical pricing Value pricing
Psychological pricing Used when marketer wants the consumer to respond
on an emotional basis rather than a rational basis. E.g. 99 rupees only as compared to Rs.100 Rs. 399 instead of Rs.400
Product line pricing When there is a range of services the pricing reflects
the benefits of parts of the range. E.g hair cut – Rs. 300, protein treatment – Rs. 400,
whole package – Rs. 700
Optional product pricing Companies will start to increase the amount the
customer spends once they start to buy, by offering them the optional but tempting “extras”.
E.g extra cheese for Rs.50 on a Rs.1100 pizza
Captive product pricing The basic product is charged low. The
accessories/refills/re usable parts are priced using premium pricing strategy
E.g. a different charger for Samsung cellphones.
Product bundle pricing Sellers combine several products in the same
package. Usually used to move old stock.
Promotional pricing Price used to promote a product. E.g. buy one get free
Geographical Pricing Price varies in different geographical regions E.g. fast food items
Value pricing When external factors like recession or increased
competition force companies to provide ‘value’ products and services to retain sales.
e.g. value meals at McDonalds
ELEMENTS OF THE MARKETING MIX
Marketing mix
Promotion
Price
Product
Place
PLACE
Also called channel, distribution or intermediary.
The mechanism through which goods or services are moved from the manufacturer/ service provider to the user or consumer.
6 BASIC CHANNEL DECISIONS
1. Do we use direct or indirect channels? (direct to consumerr or indirect through a wholesaler)
Single or multiple channels Cumulative length of the multiple channels Types of intermediary No of intermediary at each level Which companies as intermediaries to avoid
‘intrachannel’ conflicts (e.g. fighting between local distributors)
SELECTION CONSIDERATION
How to select a distributor: Market Segment
Distributor must be familiar with your target consumer and segment
Changes at different PLC stages In introductory phase, product may be available
at specific locations. In maturity, at many generic locations.
CHANNEL INTERMEDIARIES
Wholesalers Purchase bulk, break down into packages, resell
to retailers and have storage facilities Reduce producer to consumer contact, take
some of marketing responsibilities.
Agents Secure orders for producer and take commission,
do not purchase product. Usually used in international markets.
CHANNEL INTERMEDIARIES
Retailers Have a stronger personal relationship with the
consumer. Holds several brands and products, hence
consumer is exposed to several products. Are a strong brand themselves , e.g. Makro,
Metro, Imtiaz… Internet
Geographically dispersed market. Product reaches a wide audience Set up costs are low. Use e-commerce for payment.
ELEMENTS OF THE MARKETING MIX
Marketing mix
Place
Price
Product
Promotion
PROMOTION
Different activities held to promote the product to the target audience
PROMOTION MIX
Promotion Mix
Personal
Selling
Sales Person
Public Relatio
nsDirect Mail
Trade Fairs
Advertising
Sponsorship
PERSONAL SELLING
Effective way to manage personal customer relationships.
The sales person acts on the behalf of the organization
They contact consumers personally and motivate them to buy a product.
SALES PROMOTION
All kinds of promotions except advertising, personal selling and public relations.
E.g buy one get one free Coupons Money off promotions Introductory offers Free accessories
Should be carefully costed and compared with the next best alternative
PUBLIC RELATIONS
Deliberate, planned, sustained effort to establish and maintain mutually beneficial relationship between an organization and it’s publics.
Cheaper than other promotional elements.
DIRECT MAIL
Customers are targeted based upon a database.
An email or snail mail is sent directly to customers in the specific target market, with the expectation that some of them will place an order.
E.g. Medical students can be sent a mail regarding medical textbooks.
TRADE FAIRS AND EXHIBITIONS
Used to meet companies to meet with both the trade and the consumer
Intention is to create an impression rather than sell the product.
Exhibitions are good for making new contacts and renewing old ones.
ADVERTISING
‘Paid for’ communication
Used to develop attitudes, create awareness, and transmit information in order to gain response from the target market.
Advertising media such as newspapers, magazines and journals, televsion, etc.
SPONSORSHIP
When an organization pays to be associated with a particular event, cause or image.
Companies sponsor sports events like Olympics or Formula One, or TV shows etc. e.g Olper’s associated with morning shows, Kisan pak raha hay kia etc.
The attributes of the event are then associated with the sponsoring organization.
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