Marketing – What do People Want“Give People What They

Want” Sellers steps to place

product or service in hands of potential customers

Marketing

Marketing is...

‘The management process responsible for identifying,

anticipating and satisfying customer requirements

profitably’

Chartered Institute of Marketing

Market segmentation

Splitting up the market into groups of people with similar needs and characteristics

Products and marketing activities can be tailored to the needs the segments

Markets can be segmented by age, gender, lifestyle, income and geography

Market research

Market research is the process of collecting data about

customers and competitors.

There are two types of market research: Primary research – gathering first hand data e.g.

through questionnaires and focus groups Secondary research – gathering existing data e.g.

through trade journals and government statistics

Market Types Market Types

Mass Market – paper towels, cell phones Niche Market – cosmetics for sensitive skin, dog-walking

service

Market Research Qualitative

Focus groups, 1 on 1 interviews, behavioral observation

Quantitative – Large samples Use statistics to draw conclusions

The Marketing Mix

The Marketing Mix

Strategies & Activities Used by companies to

sell goods, services

The Marketing Mix The tools available to a business to gain the

reaction it is seeking from its target market in relation to its marketing objectives

7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment

Traditional 4Ps extended to encompass growth of service industry

Price

Price Pricing Strategy Importance of:

knowing the market elasticity keeping an eye

on rivals

Price

The price of a product will depend on: The cost to make it The amount of profit desired The price competitors charge The objectives of the business The price customers are willing to pay

Is there a high demand? Is demand sensitive to changes in price?

Pricing strategies and tacticsSkimming Launching with a high price when there is little

competition, then reducing the price later. Often used with technology.

Penetration A low price is charged initially to penetrate the market and build brand loyalty. The price is then increased e.g. introductory offers on magazines.

Competitive A similar price is charged to that of competitors’ products.

Loss leader Products may be sold at a price lower than the cost to produce it. Often used by supermarkets to encourage people into the store where it is hoped they will buy other products.

Pricing strategies and tacticsPsychological A price is set which customers perceive as lower

than it is e.g. $39.99 instead of $40.

Differential Different prices are charged for the same product e.g. bus fares for children are cheaper than adult prices.

Cost plus pricing An additional ‘mark-up’ is added to the cost of producing a good or service.

Strategic pricing Price is set to position an exclusive product or brand to make it more desirable for consumers, generate demand or demonstrate value

Product

Product

‘Product’ refers to the functions and features of a good or service

Should satisfy the needs of the customer May have a Unique Selling Proposition (USP) ‘Product’ also includes a range of factors such as packaging,

quality, warranties, after-sales service and branding Products and brands may suggest certain images e.g. sporty,

sophisticated, value

Product Methods used to

improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. Extension strategies Specialized versions New editions Improvements – real or

otherwise! Changed packaging Technology, etc.

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T h e P r o d u c t L ife C y c le

S a le s C u r v e

Dol

lars

T im e

G ro w th M a tu r ity D e c lin e

P r o f it C u r v e

P ro d u c t

D e v e lo p m en t

In tro d u c tio n

Product lifecycle

The product lifecycle looks at the sales of a product

over time

Stages of the product lifecycleDevelopment – high costs but no sales

Launch – high expenditure on promotion and

product development, low sales

Growth – sales increase and product should break

even

Maturity – sales stabilize, less expenditure on

promotion needed, revenue & profit should be high

Decline – sales decline, extension strategies can be

adopted or the product withdrawn

Extension strategiesExtension strategies should maintain or increase

sales.

They include: Modifying the product Reducing the price Adding a feature Promoting to a

different market

sector

Extension Extension strategiesstrategies

Promotion

Promotion Strategies

to make the consumer aware of the existence of a product

or service NOT just advertising

Promotion

The aims of promotion are to: Raise awareness Encourage sales Create or change a brand image Maintain or increase market share

Types of promotion

Above-the-line promotion

This uses mass media advertising over which a firm

has no direct control e.g. television, radio and

newspapers

Below-the-line promotion

This uses promotional media which the firm can

control e.g. direct mail, sales promotions, sponsorship

and social media

Promotional activities

Advertising e.g. TV, billboards and internet. Sales promotions e.g. loyalty cards, BOGOF,

discounts & free gifts Sponsorship – a business pays to be associated with

another firm, event or cause Direct mailing – promotional material is sent to

potential customers by post/email Public relations – building the relationship between

the firm and the public by enhancing its reputation

Promotional mix

Most businesses use a combination of different

promotional activities.

The chosen promotional mix will depend on: Cost Target market Product Competitors

AIDA

Promotional campaigns often take into account the

AIDA model: Awareness - raising awareness of a product

Interest – exciting interest in the product

Desire – creating desire for the product

Action – encouraging a purchase

Place

Place The means by which products and services

get from producer to consumer and where they can be accessed by the consumer The more places to buy the product and the easier

it is made to buy it, the better for the business (and the consumer?)

Place

Products should be conveniently available for customers to buy

‘Places’ include: Stores Mail order Telesales Internet

The use of e-commerce (promoting and selling on the internet) has

grown massively over the last few years

Channels of distributionManufacturer

Wholesaler

Retailer

Consumer

People

People People represent the business

The image they present can be important First contact often human – what is the lasting image they

provide to the customer? Extent of training and knowledge

of the product/service concerned Mission statement – how relevant? Do staff represent the desired culture

of the business?

Process

Process How do people consume services? What processes do they have to go through to

acquire the services? Where do they find the availability

of the service? Contact Reminders Registration Subscription Form filling Degree of technology

Physical Environment

Physical Environment The ambience, mood or physical presentation of the

environment Smart/shabby? Trendy/retro/modern/old fashioned? Light/dark/bright/subdued? Romantic/chic/loud? Clean/dirty/unkempt/neat? Music? Smell?

The Marketing Mix Blend of the mix depends upon: Marketing objectives Type of product Target market Market structure Rivals’ behaviour Global issues – culture/religion, etc. Marketing position Product portfolio

Product lifecycle Boston Matrix