Post on 28-Nov-2014
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Marketing
Learning Objectives
What is Marketing?
What is the marketing mix?
What is branding?
What is public relations (PR)
What is advertising?
What is the role of ethics in advertising?
Definition:
Marketing is the process of identifyingHuman needs and producing products
And services to satisfy them
Marketing Strategy
A plan setting out how a business will identify and satisfy customer needs
Marketing Strategy
Gap in market/ Market Segments
Target MarketProduct
positioningMarketing Mix
Marketing Strategy
Analysing the market
1. Market Segmentation
o Market Segment/ Niche: Group of people in which the product satisfies a similar need.
o Different needs require different marketing approaches
o Demographic segmentation – age/ income/ sex/ social class
o Psychological segmentation – attitudes /tastes
Marketing Segmentation
2. Target Market
o Target Market – Group of customers at which to aim a specific product
o Characteristics – Age
Gender
Income level
Lifestyle needs
3. Research – Product Positioning
o Product Positioning- Creating an image of the product in the customers mind.
Homework Pg 307 Answers
Q.1Name: Cost EffectiveExplain: Having an effective marketing concept in place saves a business money in the long term because instead of spending huge amounts of money on what they can make they identify consumer needs first and then develop the productExample: ipad
Name: Time ManagementExplain: Instead of spending time developing products businesses use their time more effectively by researching consumer needs and then develop the productsExample: Pepsi Max
Q.2
Niche Market: A niche market is a small market segment in which a specific product or service meets a small group of consumer needs.
Example: Bridal shoes
Q.3
Product positioning: This is when a business creates an image of the product in the consumer’s mind.
Example: Pepsi Max – Male segment ‘macho’ image
Product
Core Product – Main Function
USP - Feature distinguishing it from competitors
Augmented Product- Extras to help sell it. e.g. packaging/ guarantee
Product Design and quality
Function: Product must do what is supposed to do to satisfy target market core needs.
Form: Product must satisfy augmented needs In terms of extras. E.g. Image/ Style
Product life cycle
1. Introduction: Product is launched. Sales are slow. Focus on distribution – widespread availability
Advertising is key
2. Growth: Advertising leads to increase in sales Focus on production & quality control to meet demand
3. Maturity: Rate of increase in sales slows Find ways to update product/ provide sales promotion techniques
R&D of new products commences
4. Saturation: Sales have levelled off. Target markets are already buying the product
Can only increase sales by taking competitor’scustomers
New sales promotion techniques/ advertising/ R&Dneeded
5. Decline: Supply of product is greater then the demand of it Attempts to minimise costs by reducing spending on
advertsing to earn as much profit as possible.
* Coke Life cycle
Packaging
Protection – from damage during distribution
Presentation- Attractive to purchase
Information- Contains info about the product
Identity- Easily recognisable by consumers
Brand
Definition: is a product name which has been registered with the controller of Patents, Designs and Trade Marks and is protected against copying by competitors.
Patent:
o Is legal protection for a product or process.
o Must register product with patent office.
o The patent holder has exclusive rights to their product for 10 years
Trade mark:
o A sign representing a product/ service and can be recognised every where.
o Name/ Slogan/ Logo/ Colour/ Sound
Advantages of Brands
1. Identity: Makes the product more recognisable
2. Differentiation: Shows the differences that existsCompared to competitors products
3. Loyalty: Brand satisfaction develops trust inConsumers and they become loyal to that brand
4. New products: An established brand makesIt easier for the business to introduce new productsInto the market
Own BrandsDefinition: Brands registered by retailers
Benefits of own brands• The Retailer: Buys products more cheaply as
manufacturer is not advertising
• Consumers: Purchase cheaper products where the quality is expected to be at a minimum standard
• Producers: Get the products out to supermarket shelves without any marketing costs.
Price
Characteristics:
•Profit: Price must be set high enough to cover costs but make a profit
•Sales/ Demand: Lower the price = Higher the sales = higher profits
•Image: High price – good quality ; Low price – lower quality
Pricing strategies
1. Mark-up pricing: adding a % (mark-up) to the cost of the product and sell it at that price
2.Premium pricing: High price reflecting high quality,
Give impression of superior quality
3. Price Skimming: High price to cover high costs of developing new product.
4. Penetration pricing: Low price to enter highly competitive market to gain market share
5. Predatory pricing: Very low price to drive competitors out of the market. Can lead to ‘price war’
6. Price discrimination: Charging different prices to different market segments for the same product.
Factors influencing Price
ProfitDemand
Product Positioning
Competitors
price
Stage in product life cycle
Vat
Place• Getting products to consumers!
• Channels of distribution: route involved in getting product from producer to consumer.
Step 1: Wholesalers buy in bulk from the producer
Step 2: They store goods in warehouses and sell them on to retailers
Step 3: Retailers sell the goods in smaller quantities to consumers
A
Advantages to producer Disadvantages to producer
1. Producers sell off stock in large quantities & pass off responsibility of ‘breaking bulk’
1. Wholesalers will mark-up the price of goods. May make products uncompetitive.
2. Cost of transport & storage becomes wholesaler & Retailers responsibility
BStep 1: Large retailers purchase
directly from manufacturersStep 2: Retailers sell goods at
cheaper price to consumers
Own brand products are also produced for these retailers and online retailers
Advantages to producer Disadvantages to producer
1. Distribution simplified because wholesaler is bypassed
1. Large retailers expect large discounts for selling the producers stock reducing their profit margin
2. Using large retailers means producers can reach a mass market
CStep 1: Agents receive goods and
sell them on behalf of the producers
Step 2: The agent earns commission on goods sold
Advantages to producer Disadvantages to producer
1. Wholesaler and retailer are bypassed so profit margin increased
1. Difficult to reach mass market
D Producers sell directly to their customers
Advantages to producer Disadvantages to producer
1. Bypass other intermediaries allowing for increased profit margins
1. High focus on attracting customers instead of main focus on product itself
2.Develop good customer relationship
Factors influencing Distribution
Target market
Product Image
Ease of transport
Payment methods
Promotion
The way a business influences the target market to purchase their products
` How?
Advertising is the science of creating and placing media that Interrupts the consumer and then gets
him or her to take some Action.
Advertising
Functions of Advertising
Informative:Providing information about the function of the product/service.
Persuasive: Convincing consumers of the desirability and the benefits that set a particular product apart from the competition.
Generic:Promote the sale of a product but not a particular brand
Competitive:Comparing brands with each other showing why their product/service is better
E.G. Supervalu v Lidl & Aldi
Reminder:General adverts showing brands
Informative or Persuasive or Generic?
Informative or Persuasive or Generic?
Informative or Persuasive or Generic?
Informative or Persuasive or Generic?
Informative or Persuasive or Generic?
Factors influencing choice of advertising
medium
Target marketAdverting budget
Aim of advert
INTERNET
Mediums of advertising
E-commerce:
•Selling goods or services over the internet is called e-commerce or e-business.
•The ‘e’ stands for ‘electronic’
•B2C is used to identify sales from a business directly to consumers.
• B2B indicates sales from one business to another.
Websites
Social Media
Social media: •Also known as social networking and refers to a range of internet technologies that enable people to communicate and socialise online.
• Users can combine text, video and audio to create online messages, podcasts and status updates.
•E.G.S Facebook, Twitter and their increasing popularity in providing businesses with an opportunity to reach members of their target market.
Homework
Page 309
Q.3 Q.6 Q. 7
Answers
Question 3 1. Identity: Makes the product more recognisable
2. Differentiation: Shows the differences that exists compared to competitors products
3. Loyalty: Brand satisfaction develops trust in consumers and they become loyal to that brand
4. New products: An established brand makes It easier for the business to introduce new products Into the market
Question 6
1. Target market: This will influence whether the price will be set high or low taking into consideration their characteristics e.g age, income levels
2. Cost of production: A price must be set to cover the costs of producing the goods
3. Demand: The higher the demand for the product the higher the selling price
4. Product positioning: The image that the business are trying to portray to the public will effect pricing strategy. E.g. premium pricing.
Question 7:
In the channel of distribution there can be two intermediaries between the producer and the consumer. These are the wholesaler and the retailer.
Benefits of intermediaries:
• The wholesaler/ Retailer buys in bulk from the producer so they become the ones responsible for ‘breaking bulk’.• They incur the costs of transport and advertising to the consumer•Allows distribution of products to a mass market. Increasing sales, increasing profits
Benefits of selling directly to consumer:• Earns extra profit for the producer because they can charge higher price to the consumer as wholesaler and retailer are not taking a cut•Consumers can custom order goods to their specifications•Develop positive relationship with the consumers increasing customer loyalty
How to execute an advertising campaign
Step 1: Analyse•Collect & analyse market research of market segments and target market
Step 2: Plan•Identify aims of advert•Decide budget of adverting•Decide on media mix to be used•Evaluate cost effectiveness
Step 3: Implement• Design adverts • Produce adverts• Book advert slots• Decide on timing to showcase adverts to maximise impact
Step 4: Review• Effects on sales levels• Effects on consumer attitudes – market research• Make improvements
Laws in Advertising
ASAI- Advertising Standards Authority in Ireland
Ads must be:
Legal Decent
Honest Truthful
Office of Director of Consumer Affairs
Withdraws false / misleading ads
Prosecutes sellers who use false/ misleading ads
Sales Promotion
• Offers consumers an incentive to buy product/ service
• Used at Introduction, maturity saturation and decline phases
• Aim: Switch brands – build loyalty
Merchandising
• Point-of-sales displays: Attract attention
• E.G. Free samples
• Encourages ‘Impulse buying’
Direct Marketing
• Identifies list of potential customer
• Sends them promotional material & special offers by email/ letters
• ‘Junk mail’
Aim: To create and maintain a good image of the firm & its products
PRO: Public relations officer
How?
Press Relations: News items about the company
Press conference: Meetings arranged by the company, reporters can ask questions
Sponsorships: Arrangement where the company pays money so that their company name/ logo can be associated with that event/ team
Charity donations: Good for image of the business.
Question Evaluate the elements of the marketing mix, using a product or
service of your choice. (30 Marks)
Solution: Choose productStep 1: Define Marketing Mix & benefit of planning it.Step 2: Product
- Core/ augmented/ USP- Design- Brand – benefits of brand name- Product life cycle –Maturity stage
Step 3: Price - What will price effect
- Price strategy – why choose thisStep 4: Place
- Define Chanel of Distribution- Choose channel; Id benefits of it
Step 5: Promotion- Define- Benefits of PR- Choose medium – Link to target market