Professional Documents
Culture Documents
Earlier approaches
Orientation Profit driver Western European timeframe Description A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm Production exploiting economies of scale until the minimum efficient scale is reached. A Production until the 1950s methods production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will not rapidly alter (similar to the sales orientation). A firm employing a product orientation is chiefly concerned with the quality of Quality of Product until the 1960s its own product. A firm would also assume that as long as its product was of a the product high standard, people would buy and consume the product. A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this entails simply selling an already existing product, and using Selling 1950s and Selling promotion techniques to attain the highest sales possible. Such an orientation methods 1960s may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand. The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm essentially basing its marketing plans Needs and around the marketing concept, and thus supplying products to suit new 1970 to Marketing wants of consumer tastes. As an example, a firm would employ market research to gauge present day customers consumer desires, use R&D to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists.
Contemporary approaches
Orientation Profit driver Western European timeframe Description Relationship marketing / Relationship management Building and keeping good customer relations Emphasis is placed on the whole relationship between suppliers and customers. The aim is to provide the best possible customer service and build customer loyalty. In this context, marketing takes place between businesses or organizations. The product focus lies on industrial goods or capital goods rather than consumer products or end products. Different forms of marketing activities, such as promotion, advertising and communication to the customer are used. Similar characteristics to marketing orientation but with the added proviso that there will be a curtailment of any harmful activities to society, in either product, production, or selling methods. In this context, "branding" is the main company philosophy and marketing is considered an instrument of branding philosophy.
Social marketing
Benefit to society
Branding
Brand value
MARKETING MIX
The term marketing mix was coined in an article written by Neil Borden called The Concept of the Marketing Mix. He started teaching the term after he learned about it from an associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients"; one who sometimes follows recipes prepared by others, sometimes prepares his
Robert F. Lauterborn proposed a four Cs classification in 1993 which is more consumer-oriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing.
Cost
Channel
Communication
Consumer
Circumstances
Consumer Orientation
Solution
Information
Value
Access
Marketing Mix
Core Mix Producer Oriented Model Consumer Oriented Model Combination of Both Consumer Orientation
Product
Place Price
Product
Place Price
Consumer
Convenience Cost
Commodity
Channel Cost
Solution
Access Value
Promotion
People Process Physical Evidence
Promotion
People Process Physical Evidence
Communication
Communication
Consumer Circumstances Corporation (Org, Comp,Stakeholder)
Information
What is a Product?
A Product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need Includes:
Physical Goods Services (activities, benefits, etc. that are intangible -- do not result in
ownership of a physical good)
Soap
Levels of Product
(p. 294, Figure 8.1)
Product is a complex bundle of benefits
3. Augmented Product
Installation
Additional services & benefits (unexpected)
Packaging
Delivery & credit Brand name Quality level Core benefit or service Features Aftersale service
Design
2. Actual Product
The physical product or service
Warranty
1. Core product
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Shopping Products
Buy less frequently, planned,
Selective distribution Promotion by producer & retailers E.g., clothing, cars, appliances
Specialty Products
Special purchase effort, but
Unsought Products
New innovations, & products
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Product Attributes
(pp. 299-301)
Marketings role represent the voice of the consumer
Developing a product or service involves defining the benefits that it will offer such as: Product quality
Ability of product to perform its functions; includes level (performance quality) & consistency (conformance quality) Help to differentiate the product from the competition Style = appearance Design = performance / function (as well as appearance)
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Product features
Product style & design
Branding
Attributes
Identification
Advantages to consumers (a promise) Brand equity (power & value) the enduring asset
Consistency
Awareness
Loyalty
Brand Name
(pp. 302-303)
Mr. Clean U-Haul Tide Kodak In-N-Out Energizer Crest Xerox Pepsi
Easy to pronounce, recognize, remember Distinctive not too similar to competitors names Translates to other languages
Enco g Exxon
Brand Sponsor
(pp. 303-306)
Manufacturers brands national brands Private brands retailer / store brands Growth ! Battle of the brands Major source of advantage to retailers Source of advantage to manufacturers of private brands Licensed brands fees & royalties to owner of name Very profitable in short-term, but risks Celebrities, cartoon characters, designers Corporate brand licensing Co-Branding joint venture or licensing Benefit of broadened consumer appeal Partnership risks Risks to brand equity
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Brand Strategies
(Figure 8.4, pp. 306-309)
Name: Existing
Most new products (new flavors, forms, colors, ingredients, package sizes) (P & G, Estee Lauder, Seiko)
Product Category:
New
Brand Extension
New
Multibrands
New Brands
New Brands & Multibrands: + unique positioning, brand equity Extensions widely used but most fail ! Many risks
+ instant awareness, faster acceptance, less $ to introduce - failure of new product reflects on original - name may be inappropriate - line extensions cannibalize original (little, or even negative, sales increase) - dilutes positioning - loses specific meaning & brand equity 20
Filling
Stretching
Lengthen within current range of quality & price + Prestige - May not be credible
Upward Downward
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Safety issues
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Product Differentiation
Creating a value package that is better/different than competitions in a way that is meaningful to the customer
Not just how is your product different but distinctive ? The key phrase is meaningful to the customer A black toothpaste would be different but absurd!
Product Differentiation
Different consumers have different tastes, same old will not do Consumers like to switch too Consumers like to be unique Novel stimuli are more noticed
A white person here would be instantly noticed Need to stand apart from the crowd Else, will be a me-too product
Product Differentiation
Differentiation Through Quality
Quality is the extent to which product meets customer needs and wants Can be either Performance, Conformance, Durability or Style Everest spices, acc to MR Stanfords CS Dept, Mumbai Dabbawallas sheer performance sets them apart
Product Differentiation
Differentiation Through Conformance
Product Differentiation
Differentiation Through Style/Status
Designer wear Rolex watches Mercedes Benz Indian software companies for instance
Product Differentiation
Differentiation Through Innovation
One must work hard at differentiation, else a problem in the long run Sometimes, diff attribute may be irrelevant e.g. Pears transparency Generally, good companies will have a key strength
Sony, Apple, 3M
Services Marketing
Intangibility
Inseparability
(internal marketing company to employees) (interactive marketing employees to customers) Quality depends on who provides service, and when
Cant be stored for later sale or use (match supply & demand)
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Variability Perishability
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Price
Price
Price is the sum of all the values that consumers exchange for the benefits of having or using a product or service.
Price has historically been the major factor affecting buyer choice; but non-price factors have become increasingly important. The only element in the marketing mix that produces revenues; all others represent costs. Often handled poorly too cost-oriented & tactical, rather than customer-value oriented & 32 strategic.
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Marketing Objectives
Choose the price that produces the maximum current profit (short-term)
Survival
Low prices to cover variable costs and some fixed costs to stay in business (s-t)
Low prices to prevent competition from entering the market Temporary low prices to create excitement or draw more customers Nonprofit organizations full or partial cost recovery
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Pure Monopoly
Single seller
Monopolistic Competition
Many sellers who trade over a range of prices (consumers perceive product as differentiated sellers have control)
Oligopolistic Competition
Few sellers, very sensitive to each others pricing (relatively undifferentiated product no control)
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P2 P1 Q2 Q1
|-10%| = 1 | 20%| 2
necessity unique, superior inexpensive few substitutes hard to compare
Price
Quantity Demanded
P2
P1 Q2 Q1
Elastic Demand demand changes greatly with a small change in price (market is price sensitive)
|- 60%| = 3 | 20%|
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P2 P1 Q1 Q2
Quantity Demanded
Very popular:
- must be certain of costs - ignores competition - ignores consumer perceptions Only works if competitors have the same cost structure, and all use ~same markup Competition driven pricing going rate + Collective wisdom + Avoids price wars in oligopoly - Little control over price
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Value-Based Pricing
Product
Cost Price Value Customers
Product-driven Starts with product & must convince customers its worth the price
Customers
Value Price Cost Product
Customer-driven Starts with customers & designs the product to price target costing (p. 376) 40
Definitions
Market-Skimming Pricing
Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the high price.
Market-Penetration Pricing
Setting a low price for a new product in order to attract a large number of buyers and a large market share.
12 - 41
Price points
Optional-Product Pricing
Pricing optional or accessory products sold with the main product
12 - 42
High margins are often set for supplies Fixed fee plus a variable usage rate
12 - 43
Allowances
Trade-in allowances Promotional allowances
12 - 45
Also called revenue or yield management Certain conditions must exist for segmented pricing to be effective
12 - 46
Frequent use leads to industry price wars which benefit few firms
12 - 50
12 - 52
Price Changes
Initiating Price Cuts is Desirable When a Firm:
Has excess capacity Faces falling market share due to price competition Desires to be a market share leader
12 - 53
Price Changes
Price Increases are Desirable:
If a firm can increase profit, faces cost inflation, or faces greater demand than can be supplied.
Price Changes
Buyer reactions to price changes must be considered.
Competitors are more likely to react to price changes under certain conditions.
Number of firms is small Product is uniform Buyers are well informed
12 - 55
Price Changes
Respond To Price Changes Only If:
Market share / profits will be negatively affected if nothing is changed. Effective action can be taken:
Reducing price Raising perceived quality Improving quality and increasing price Launching low-price fighting brand
12 - 56
Predatory pricing
12 - 58
Place
Place represents the location where a product can be purchased.
It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.
Place
Physical distribution are activities involved in transporting products from the producer to the consumer: Mode of transport
Warehousing & Storage Order processing Inventory control
Place
through which the ownership of goods flow on its way from the producer to the customer Distributor
Super-stockist Wholesalers Retailers Channels of distribution are the routes
Place
Instruments that determine the intensity & manner in which goods or services will be made available
Types of channels, density of distribution, trade-relation mix, merchandising advise
Place
Channels
Coverage
Locations
Inventory
Transportation
Logistics
Hypermart-Store Signage's
Availability- Place
Large Format stores
Shoppers Stop
Pantaloons
Big Bazaar
Retail brands
Stores
Nokia Store
Place
Global Players in India
Place
Markets
Place
Stores
Local stores
Local kirana stores
Promotion
Promotion activities are meant to communicate & persuade the target market to buy the companys products This is done by:-
Promotion
Advertising Personal selling Sales promotion- POS Public Relations Word of mouth Viral advertising
Promotion
Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has five distinct elements advertising, personal selling, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the five principal elements together Advertising covers any communication that is paid for, from and cinema commercials, radio and Internet adverts through print media and billboards.
Personal selling
Personal Selling: Face to face personal communication- Eureka Forbes In person selling, tele-marketing Advertising- Mass communication efforts through media Sales Promotion- Communication through contests, OOH, trade shows, free samples, yellow pages, call helplines
Personal Selling
Personal Selling
Discount coupons
Discount coupons
Promotion-2
Publicity- Communicating with an audience by personal or non-personal media that are not paid for delivering the message Print media news, broadcast media newsUTI,PTI, Reuters, annual reports, speeches by employees
Branding
Signages
Known companies
Recognizable companies
Nokia
Nokia
Messages
Fly High
Chips
Competition
Celebrity endorsement
Using famous people to attract target segment
TV Channels
TV Channels
TV Channels
TVC
TV Channels
TV Channels
Print Media
Print- Newspapers & Magazines
Newspapers
Print Media
Newspapers & Magazines
Read everywhere
Omnipresent
Radio
Growing radio stations in India
Radio Stations
Numerous- FM
Radio channels
Meow targets at women
Public Relations
Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum.
Press Release
Press Release
Public Relations
Press Conferences
Media Entertainment
PR Material
Press kit to be given to press with all info.
Press Conference
Spokesperson of the company talks to the press
Client Meetings
Word of mouth publicity
Competitors
Responding to competitor activity & messages You may have seen similar activity in cola ad wars
Reports in media
Cola war shifts to a new turf The famous cola wars have found a new battleground the Indian fields. The worlds largest beverage company CocaCola, like its rival PepsiCo, is finalising plans for sourcing fruit from India for its juice brands.
OOH
Cola vans act as OOH
OOH
Pepsi van
OOH
Cola signages
Vending Machines
Vending machine- Note both brands
Recognizable logos
Coke vs Pepsi
Sales Promotion
Yeh Dil Maange More!!!
Point of Sales
Point of sales (POS) or checkout refers to both a checkout counter in a shop, and the location where a transaction occurs
POS Display
Cola Ads-Promotion
Cola drinks- Thums Up, Coca Cola
Vodafone vs Airtel
Airtel
Signages
Celebrity endorsement
Reliance Telecom
Reliance
Reliance Mobile
Hritik Roshan
Idea Cellular
IDEAs ad campaigns based on the theme of Democracy; Championing a world without caste; Championing a world in which no one suffers from the disability to communicate; and Education for All, have been a huge success amongst all categories of audience.
Effectiveness of Campaign
The testimony of the success of the campaign is reflected from the rapid growth of IDEAs subscriber base in the country. The Aditya Birla Group company has grown to become the 3rd largest private GSM operator with over 43 million subscribers across 16 service areas, nationally.
Bus shelters
Same message across all media
Outdoor
Hoarding/Billboard
OOH
Signages & Gates
Websites
Airline Ad Wars
Marketers should be ready to face communication challenges Jet Airways- Weve Changed Kingfisher- We made them change Go Air- Weve not changed; we are still the smartest way to fly
Ad wars
In Mumbai- Same location on Nariman Point
Viral Marketing
Word of mouth
On the internet
On the Internet, viral marketing is any marketing technique that induces Web sites or users to pass on a marketing message to other sites or users, creating a potentially exponential growth in the message's visibility and effect.
www.hotmail.com
Cadburys in UK
Cadbury's Dairy Milk 2007 Gorilla advertising campaign was heavily popularised on YouTube and Facebook.
Gorilla
Gorilla is a British advertising campaign launched by Cadbury Schweppes in 2007 to promote Cadbury Dairy Milk-brand chocolate. The 90-second television and cinema advertisement, which formed the centrepiece of the 6.2 million campaign, was created and directed by Juan Cabral and starred actor Garon Michael. The campaign itself, which comprised appearances on billboards, print newspapers and magazines, television and cinema spots, event sponsorships and an internet presence, was handled by advertising agency Fallon London, with the online segment contracted out to Hyper.
Gorilla Ad Campaign
Gorilla Campaign
Going Viral
Funny Helpful & Unique Controversial Amazing & Spectacular Schematic
Word of Mouth
Word of Mouth
T-Shirts
T-Shirts with company & Logo message
Inflated Balloons
Scooter covers