Chapter 10 IM

Lesson Outline:
1. Product
Innovation & Marketing
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical Evidence
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Product Product
Product is the Product

heart of
Marketing Mix
Everything, both favorable and

unfavorable, that a person Price Promotion
receives in an exchange
Place (Distribution)
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Functions of Packaging What Is Price?
Holding and protecting
Promoting
Storage, use and convenience Price is that which is given

up in an exchange to
Environmental friendliness acquire a good or service.
1
Pricing Strategies Place (Distribution)
Penetration Pricing
Price Skimming
Concerned with making the
Psychological Pricing
products available when and
where the customers want
them.
Product Line Pricing
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Distribution channels Distribution Intensity Strategy
A form of distribution aimed at having a

Intensive product available in every outlet.
Example: Snacks, drinks
A form of distribution that established one or

Exclusive a few dealers within a given area.
Example: Harley Davidson, Mercedes
A form of distribution achieved by screening

dealers to eliminate all but a few in any single
Selective
Area.
Example: computers, handphone
Promotion Promotional Strategy
Promotional Strategy
A plan for the optimal use of the
elements of promotion:
Communication by marketers that Advertising
informs, persuades, and reminds Public Relations
potential buyers of a product in Sales Promotion
order to influence an opinion or Personal Selling
elicit a response.
Competitive
Advantage
2
Promotional Mix Advertising
Promotional Mix
Impersonal, one-way
Combination of promotion tools used
mass communication about
to reach the target market and fulfill
a product or organization
the organizations overall goals.
that is paid for by a
Advertising
Public Relations marketer.
Sales Promotion
Personal Selling
Personal Selling
Personal Selling
Advertising Media
Planned presentation to one or more
prospective buyers for the purpose of
making a sale.
Personal Selling Personal Selling
personal selling tends to:

Traditional Relationship Use fewer resources, pricing is often negotiated.
Selling Selling Products tend to be fairly complex (e.g. financial
services or new cars).
There is some contact between buyer and seller after
the sale so that an ongoing relationship is built.
Client/prospects need specific information.
The purchase tends to involve large sums of money
3
Sales Promotion Sales Promotion
samples, coupons, cash refund

offers, price packs, premiums,
prizes, patronage rewards, Consumers
Marketing activities--other than personal free trials, product warranties,
selling, advertising, and public relations-- and point-of-purchase displays
and demonstrations
that stimulate consumer buying and
dealer effectiveness. price-off, advertising and
display allowances, Trade
free goods, push money,
and specialty-advertising items
conventions, trade shows,

contests, sweepstakes, Business
and games
Example of Sales Promotion Tools Example of Sales Promotion Tools
Free samples Premiums

Offered free or at minimum cost as a
Stimulate trial of product. bonus.
Increase sales volume at the early stage of the Used to attract competitors customers,
product life cycle. different sizes of established products
Examples:
Batman Forever with McDonalds,
Contest Kelloggs, Sears
Consumers compete based on their analytical or Burger King with the Lion King movie
creative skills.
Example of Sales Promotion Tools Public Relations
The marketing function that

Trade shows
evaluates public attitudes, identifies areas
within the organization that the public
may be interested in, and executes a
program of action to earn public
understanding and acceptance.
Coupons
Usually reduce the purchase price or
offered as cash.
4
Functions of Public Relations PROCESS
Evaluates public Identifies areas Executes programs

attitudes of public interest to win public
Procedures, mechanisms, and flow

of activities by which the service is
delivered, such as the service
delivery and operating systems
Publicity within an organization.
Public information about a company, good, or service
appearing in the mass media as a news item.
Service Process Categories Physical Evidence

Categorizing Concept Examples
Service Process
People Customers need to be physically present Passenger transportation
Processing throughout service delivery to receive its Haircutting
desired benefits. dental work
Possession the object requiring processing must be Airfreight

Processing present, but the customer need not be. lawn mowing
cleaning services Supports a service bought or
performed, and helps the customers
Mental Stimulus customers must be present mentally but Entertainment
Processing can be located either in a specific service spectator sports
to shape perceptions of a service,
facility or in a remote location theater performances through the creation of the
education environment and atmosphere
Information once the request for service has been Insurance
Processing initiated, little direct involvement with the Banking
customer may be needed. Consulting
Physical Evidence People
Element of Physical Concept

Evidence
Facility Exterior attributes are visible on the outside of the facility such
as factors are exterior design, signage, parking,
landscape, surrounding environment.
For an example, the owner of a shop in a mall does not
have the power to change the parking lot design but if
the customer struggles to find parking outside the shop If people are motivated to innovate, the
this still fall under the overall service cycle. culture within organization will follow;
otherwise no process will lead to initiate
Facility Interior Attributes are visible on the inside the facility such as innovation. Different people have different
interior design, equipment, signage, layout, skills. This is helpful in term of exposing new
temperature. idea in order to guarantee the success.
For an example, after struggling to find parking, a store
was placed with soft lighting, gently music and air
conditioning that give relaxation to customer.
5
Type of People and their
Contribution in Innovation
Person who builds network among people by creating and
Connectors distributing new offers.
Librarian collect ideas and providing organized access for information.
determine appropriate evaluation scheme for idea transparent and

Framer consistent.
Judge evaluate ones idea using framers framework.
provides a representation of the idea to the customers for feedback

Prototyper and improvement. Then, the process of improvement will go on until
it meets customer needs.
measures number of ideas submitted, time from submission to
Metric Monitor evaluation and organizations process and progress.
Story teller is responsible for collect, keep and tells stories about organization.
identifies new trends and analyzes those trends and impact on

Scout organization.
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Lesson Outline:

Innovation Management All Rights Reserved

Product is the Product

Everything, both favorable and

Functions of Packaging What Is Price?

Holding and protecting

Storage, use and convenience Price is that which is given

Distribution channels Distribution Intensity Strategy

A form of distribution aimed at having a

A form of distribution that established one or

A form of distribution achieved by screening

Promotion Promotional Strategy

Personal Selling Personal Selling

personal selling tends to:

samples, coupons, cash refund

conventions, trade shows,

Example of Sales Promotion Tools Example of Sales Promotion Tools

Free samples Premiums

Example of Sales Promotion Tools Public Relations

The marketing function that

Evaluates public Identifies areas Executes programs

Procedures, mechanisms, and flow

Service Process Categories Physical Evidence

Possession the object requiring processing must be Airfreight

Physical Evidence People

Element of Physical Concept

Librarian collect ideas and providing organized access for information.

determine appropriate evaluation scheme for idea transparent and

Judge evaluate ones idea using framers framework.

provides a representation of the idea to the customers for feedback

identifies new trends and analyzes those trends and impact on

Innovation Management All Rights Reserved

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