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Notes on Marketing Basics

Notes on Marketing Basics

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Published by: James on Oct 12, 2007
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Marketing
a
process of planning and executing the:
Conception,
Pricing,
Promotion,
Distribution of ideas, goods, and services tocreate exchanges that satisfy individual andorganizational objectives.
Marketing Activities
get attention
motivate & encourage people
facilitate them to act (buy)
get them to buy again
Define your product/servicePromotion / promotingDistribute your product/serviceMaintain a relationship
Building and nurturing a relationshipCreate, expand and maintainUnderstand consumer behavior
how people buy, what they buy, when theybuy and why they buy
Customer focus (orientation):
Customer wants
1
 are researched,
 The information is disseminated throughoutthe firm and products are developed
Customer satisfaction is monitored andadjustments made if necessary.
3 Assumptions of Transactional Marketing
 There is a large number of potentialcustomers
Customers and their needs are fairlyhomogenous
It is rather easy to replace lost customers withnew on3 Levels of Marketing
Corporate
1.
'What business should we be in andwhat opportunities should wepursue?'
This is marketing before weeven have a business, idea or product.
Business
2.
'How are we going to competeagainst the competition?
'Focused onthe competition; deals with long termsustainable advantages and businessmodels
Functional
3.
'How do we create and keepcustomers?
'; '4ps' of the marketing mix. This level of marketing defines and
1
 
determines what its potential customers desire
develops
products
,
prices
them,
promotes
them and then
distributes
them in a way that helps a companycreate and sustain demand for theirproducts.
4Ps of Marketing
Product
: The Product management andProduct marketing aspects of marketing dealwith the specifications of the actual good orservice, and how it relates to the end-user'sneeds and wants.
Pricing
: This refers to the process of setting aprice for a product, including discounts.
Promotion
: This includes advertising, salespromotion, publicity, and personal selling, andrefers to the various methods of promoting theproduct, brand, or company.
Placement
or distribution refers to how theproduct gets to the customer; for example,point of sale placement or retailing. This fourthP has also sometimes been called Place,referring to the channel by which a product orservice is sold (e.g. online vs. retail), whichgeographic region or industry, to whichsegment (young adults, families, businesspeople), etc.
Advertising
Advertising is paid communication through a non-personal medium in which the sponsor isidentified and the message is controlled.
Variations include:
publicity & public relations
product placement
2
(plug on sitcom)
sponsorship & underwriting spots
3
(e.g. PBS)
sales promotion
Viral Marketing
viral advertising refer to marketing techniquesthat use pre-existing social networks to produceincreases in brand awareness.
Advantages:
Ease of executing the marketing campaign,
Relative low-cost (compared to direct mail)
Good targeting,
High and rapid response rate
Mass Market vs. Niche Market
2
 
a real commercial product is used in fictional or non-fictionalmedia, and the presence of the product is a result of aneconomic exchange. When featuring a product is not part of an economic exchange, it is called a
product plug
.
3
 
spots usually mention the name of the sponsor, and canresemble traditional advertising in commercial broadcasting,but there are usually legal restrictions, such as a prohibition of making product claims, announcing prices, or providing anincentive to buy a product or service.
 
Mass marketing is used to sell a product to a large variety of customers in large amounts. Mass marketing is the oppositeof niche marketing, where a product is made especially forone person or a group of person
Marketing Innovations & Theory:
exploit people's herd mentality to increase sales
Mass Customization (PERSONALIZATION)
Adaptive customization
- firms produce astandardized product, but this product iscustomizable in the hands of the end-user(the customers alter the product themselves)
Collaborative customization
- talk toindividual customers to determine the preciseoffering that best serves the customer'sneeds (personalized marketing and personalmarketing orientation). This information isused to specify and manufacture a productthat suits that specific customer
Cosmetic customization
- produce astandardized physical product, but market itto different customers in unique ways.
Product/Service Differentiation
 
differentiating it from competitors' products aswell as one's own product offerings
Sources:
Differences in quality or design among output(product)
Ignorance of buyers regarding the essentialcharacteristics and qualities of goods they arepurchasing
Pervasive sales promotion activities of sellersand, in particular, advertising
Differentiation in the locations of sellers of thesame good;
Product/Service Positioning
How are you, your product/service perceived in the marketcompared to the competition?
A good position is:
1. What makes you unique2. This is considered a benefit by your targetmarket
Re-positioning
involves changing the identityof a product, relative to the identity of competingproducts
De-positioning
involves attempting tochange the identity of competing products,relative to the identity of your own product,
Environment
1. What is our marketing environment?2. What is our competitive advantage?
Positioning Strategies:
Product Attributes
: What are the specificproduct attributes?
Benefits
: What are the benefits to thecustomers?
Usage Occasions
: When / how can theproduct be used?
Users
: Identify a class of users.
Against a Competitor
: Positioned directlyagainst a competitor.
Away from a Competitor
: Positioned awayfrom competitor.
Product Classes: Compared to differentclasses of products.
 
Positioning Differences
Important
: The difference delivers a highlyvalued benefit to the target buyers
Distinctive
: Competitors do not offer thedifference, or the company can offer it in amore distinctive way
Superior
: The difference is superior to otherways that the customer might obtain thesame benefit
Communicable
: The difference can beexplained and communicated to the targetbuyers
Preemptive
: Competitors cannot easily copythe difference
Affordable
: Buyers can afford to pay thedifference
Profitable
: Company can introduce thedifference profitably
 
Segmentation Variables:
Main Segments (subsets)
Geographic
Demographic
(age, gender, income,occupation, religion)
Psychographic
(personality, value, attitude)
Behavioral
(benefit sought, brand loyalty)
Who are the Innovators and Earlyadopters?
 
 
Venturesomeness
: the willingness anddesire to be daring in trying something newand different
Social integration
: frequent and extensivecontact with others in one’s area
Cosmopolitan
: point of view extendingbeyond the immediate neighborhood orcommunity
Social mobility
: upward movement on thesocial scale
Privilegedness
: attitude and possession of money (less risky to try something new)
 
Upselling
a marketing technique where the customer isoffered a higher-priced version of a product or anadditional product to the original sale.
 
Target Market:
Each class has different risk tolerances.
Innovators
4
First 5% - 10% that adopt theproduct
Early Adopters
Next 10% - 15%
Early Majority
Next 30%
Late Majority
Next 30%
Laggards
Remaining 20%
Product Adaptability
Relative advantage of the product
: Howsuperior is the innovation to the product orother problem-solving methods it wasdesigned to compete against?
Compatibility
: Does it fit with currentproduct usage and customer activity?
Complexity
: Will difficulty or confusion arisein understanding the innovation’s basic idea?
Divisibility
: How easily can trial portions of the product be purchased?
Communicability
: How likely is the productto appear in public places where it is easilyseen and studied by potential users?
 
Distribution Channels Functions
What is the purpose of a distribution channel?
Information
: gathering and distributingmarketing research
Promotion
: developing andcommunicating offers
Contact
: communicating with prospectivebuyers
4
Matching
: fitting the offer to the buyer'sneeds
Negotiation
: reaching agreement onprice and terms
Physical
 
distribution
: transporting andstoring the goods
Financing
: getting and using funds tocover the costs of channel work
Risk taking
: assuming the risks thechannel work.
Distribution
Retail
Online
In Person
In House
Pricing Strategies
Product Line
: Setting price steps betweenproduct line items
Optional Product
: Pricing optional oraccessory products
Captive Product
: Pricing products that mustbe used with the main product
By-Product
: Pricing low value by product toget rid of them
Product Bundle
: Pricing bundles of productssold together
 
New Product Pricing StrategiesMarket-Skimming
: Initially set high prices to "skim"revenue layer by layer from the market. Works when:
Quality and image support the higher price
Enough buyers want the product at that price
Cost of producing a small volume cannot be high
Competitors should not be able to enter the marketeasily
Market Penetration
: Set a low initial price in order topenetrate the market quickly and deeply to win a largemarket share. Works when:
Market is highly price sensitive
Production and distribution costs fall as salesvolume increases
Low price must help keep out the competition
Price Adjustment
Discount & Allowance
: reduced prices to rewardcustomer responses such as paying early orpromoting the product
Discriminatory
: adjusting prices to allow fordifferences in customers, products, and locations
Psychological
: adjusting prices for psychologicaleffects. Ex: $299 vs. $300
Value
: adjusting prices to offer the rightcombination of quality and service at a fair price
Promotional
: temporarily reducing prices toincrease short-run sales

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actually it is the base of marketing..good
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