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Contents
1. Marketing Mix and Key Marketing Activities
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Marketing Mix and
Market Segmentation
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Marketing Credo
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Marketing Mix
Product Price
Target
Market
Place Promotion
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Key Marketing Activities
Consumer Analysis
Distribution
Product Planning
Planning
Promotion
Price Planning
Planning
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Key Marketing Activities
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Product/Market Matrix
Market Product
Existing Markets
Penetration Development
Market Diversification
New Markets
Development
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Product/Market Matrix
• The firm seeks to achieve growth with
Market
existing products in their current market
Penetration
segments, aiming to increase its market
share
• Effective when the market is growing or not
yet saturated
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Market Segmentation
Should be:
• measurable
• accessible by communication and distribution
channels
• different in its response to a marketing mix
• durable (not changing too quickly)
• substantial enough to be profitable
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Types of Market Segmentation
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Types of Market Segmentation
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Step in Planning A Segmentation Strategy
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Product Planning and
Development
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Products : Types of Goods
Convenience
Goods
Types of Shopping
Goods
Goods
Specialty
Goods
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Convenience Goods
• Those purchased with a minimum of effort,
Convenience because the buyer has knowledge of
Goods product characteristics prior to shopping
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Convenience Goods
• Staples are low-priced items that are
Convenience routinely purchased on a regular basis,
Goods such as detergent, milk, and cereal
• Impulse goods are items that the
consumer does not plan to buy on a
specific trip to a store, such as candy, a
magazine, and ice cream
• Emergency goods are items purchased
out of urgent need, such as an umbrella
during a rainstorm, a tire to replace a flat,
or aspirin for a headache
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Shopping Goods
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Shopping Goods
• For attribute-based shopping goods,
Shopping consumers get information about and then
Goods evaluate product features, warranty,
performance, options, and other factors.
The goods with the best combination of
attributes is purchased. Sony electronics
and Calvin Klein clothes are marketed as
attribute-based shopping goods
• For price-based shopping goods,
consumers judge product attributes to be
similar and look around for the least
expensive item/store
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Specialty Goods
• Those to which consumers are brand
Specialty loyal.
Goods • They are fully aware of these products
and their attributes prior to making a
purchase decision.
• They are willing to make a significant
purchase effort to acquire the brand
desired and will pay a higher price than
competitive products, if necessary.
• For specialty goods, consumers will not
make purchases if their brand is not
available. Substitutes are not
acceptable.
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Services
Rented-
goods
Service
Type of Owned-goods
service
Services
Non-goods
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Services
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Characteristics of Services
• The intangible nature of many services makes the
consumer's choice more diffi-cult than with goods
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Product Life Cycle
Growth Maturity
Introduction Decline
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Product Life Cycle
Characteristics Introduction Growth
Marketing objective Attract innovators and Expand distribution and
opinion leader to new product line
product
Industry sales Increasing Rapidly increasing
Competition None or small Some
Industry profits Negative Increasing
Customers Innovators Affluent mass market
Product mix One or two basic models Expanding line
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Product Life Cycle
Characteristics Maturity Decline
Marketing objective Maintain differential (a) cut back,
advantage as long as (b) revive,
possible (C) terminate
Industry sales Stable Decreasing
Competition Substantial Limited
Industry profits Decreasing Decreasing
Customers Mass market Laggards
Product mix Full product line Best-sellers
Distribution Greatest number of Decreasing number of
outlets outlets
Pricing Full line of prices Selected prices
Promotion Competitive Informative
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New Product Planning
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New Product Planning
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Screening Checklist
GENERAL CHARACTERISTICS OF NEW PRODUCTS
Profit potential
Existing competition
Potential competition
Size of market
Level of investment
Patentability
Level of risk
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New Product Planning
• Concept testing presents the consumer with
a proposed product and measures attitudes
Concept
and intentions at this early stage of
Testing
development
• Concept testing is a quick and inexpensive
way of measuring consumer enthusiasm
ProfitabilityTime to recoup initial costs; short- and long-run total and per-
unit profits; control over price; return on investment (ROI)
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New Product Planning
• Product development converts a product idea
Product into a physical form and identifies a basic
Development marketing strategy
• It involves product construction, packaging,
branding, product positioning, and attitude and
usage testing.
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Promotion Mix :
Advertising, Publicity, Personal
Selling and Sales Promotion
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Promotion Mix
Advertising Publicity
Target
Market
Personal Sales
Selling Promotion
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Promotion Mix
Factor Advertising Publicity Personal Selling Sales Promotion
ExampleTelevision ad for a Kodak Newspaper article Retail sales personnel A Kodak video camera
video camera reporting on the unique explaining how a Kodak displayed at consumer
features of a Kodak video camera works photography shows
video camera
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Four Key Steps to Advertise
Determine
message content
and devise an ad
Specify the
location of an ad
(media placement)
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Things to Consider in Advertising
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Things to Consider in Advertising
Frequency is how often a medium can be
Frequency used. It is greatest for newspapers, radio, and
television, where ads may appear daily and
advertising strategy may be easily changed
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Things to Consider in Advertising
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Publicity : Poor and Good Response
Situation Poor Response Good Response
Fire breaks out in aRequests for information by Company spokesperson explains the cause of
company plantmedia are ignored. the fire and company precautions to avoid it and
answers questions.
New productAdvertising is used without Pre-introduction news releases, product
introducedpublicity samples, and testimonials are used.
News story aboutRequests for information by media Company spokesperson states that tests are
product defectsare ignored, blanket denials are being conducted on products, describes
issued, hostility is exhibited toward procedure for handling defects, and answers
reporter of story. questions.
CompetitorThe advertising campaign is Extensive news releases, statistics, and
introduces newstepped up. spokespeople are made available to media to
product present company's competitive features.
High profitsProfits are rationalized and positive Profitability is explained, data (historical and
reportedeffects on the economy are cited. current) are provided, uses of profits are
detailed: research, community development.
Overall view ofThere is an infrequent need for There is an ongoing need for publicity, strong
publicitypublicity; crisis fighting is used when planning, and contingency plans for bad
bad reports are circulated. reports.
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Developing a Publicity Plan
Setting Outlining
objectives types of
publicity
Creating
Selecting
publicity
media
messages
Timing
publicity
messages
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Publicity Type
Publicity Type Example
News publicityMacy's describes its decision to sell its stores in the Midwest.
Business feature articleToyota explains its goals and objectives for the 2020.
Service feature articleA trade association offers 10 tips on how to reduce home heating
costs.
Background editorialMc Kinsey presents a biography of its president and his rise through
releasethe company.
Emergency publicityThe Red Cross makes a request for aid to tornado victims.
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Specific Personal Selling Objectives
Type of Objective Illustrations
Demand-Oriented
Information To fully explain all good and service attributes
To answer any questions
To probe for any further questions
Image-Oriented
Industry and company To maintain a good appearance by all personnel in contact with consumers
To follow acceptable sales practices
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Personal Selling Process
Sales Answering
Presentation Questions
(questions and
objections)
Follow up
Close (satisfaction,
referrals,
repurchase)
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Types of Sales Promotion
Type Characteristics Illustration
CouponsManufacturers or retailers advertise P&G mails consumers a 25-cents-off
special discounts for customers who coupon for Sure deodorant, which
redeem coupons. can be redeemed at any
supermarket.
Refund orA consumer submits proof-of-purchase First Alert home fire alarms provides
rebate(usually to the manufacturer) and $5 rebates to consumers submitting
receives an extra discount. proof of purchase.
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Types of Sales Promotion
Type Characteristics Illustration
Bonus orConsumers receive discounts for Some stores run I-cent sales,
multipackspurchasing in quantity whereby the consumer buys one
item and gets a second one for a
penny.
Point-of-In-store displays remind Chewing gum sales in supermarkets
purchasecustomers and generate impulse are high because displays arc placed
displayspurchases. at checkout counters.
GiftsConsumers are given gifts for Savings banks offer a range of gifts
making a purchase or opening a for consumers opening new
new account. accounts or expanding existing ones.
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Sales Promotion Advantages
• It helps attract customer traffic and maintain brand or store
loyalty
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Sales Promotion Disadvantages
• The image of the firm may be lessened if it continuously runs
promotions. Consumers may view discounts as representing a
decline in product quality and believe the firm could not sell its
offerings without them.
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Sales Promotion Disadvantages
• Sometimes sales promotions shift the focus away from the
product onto secondary factors. Consumers may be attracted by
calendars, coupons, or sweepstakes instead of by product
quality, functions, and durability. In the short run this generates
consumer enthusiasm. In the long run this may have adverse
effects on a brand's image and on sales, because a product-
related differential advantage has not been developed.
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Distribution Planning and
Pricing Strategy
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Distribution Planning
• Distribution planning is systematic decision making
regarding the physical movement and transfer of
ownership of a product from producer to consumer.
• It includes transportation, storage, and customer
transactions.
• Distribution functions are carried out through a channel of
distribution, which is comprised of all the organizations or
people involved in the process.
• These organizations or people are known as channel
members or middlemen.
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Intensity of Channel Coverage
Characteristics Exclusive Selective Intensive
Distribution Distribution Distribution
ObjectivesPrestige
Objectives image, Moderate market Widespread market
channel control and coverage, solid image,coverage, channel
loyalty, price stability some channel control acceptance, sales
and high profit and loyalty, good volume and profits
margins sales and profits
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Intensity of Channel Coverage
Characteristics Exclusive Selective Intensive
Distribution Distribution Distribution
MarketingPersonal selling, Promotional mix, Mass advertising,
Emphasis pleasant pleasant shopping nearby location,
shopping conditions, conditions, good items in stock
good service service
ExamplesAutomobiles,
Examples Furniture, clothing, Groceries,
designer clothes, watches household
caviar products,
magazines
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Methods of Channel Cooperation
Factor Manufacturer Action Channel Member Action
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Pushing and Pulling Strategy
Manufacturer Manufacturer
Channel Channel
members members
Consumers Consumers
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Price Planning
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Factors Affecting Pricing Decisions
Channel
Government
Members
Total Effects
on Price
Decisions
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Consumers and Price Decisions
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Consumers and Price Decisions
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Consumers and Price Decisions
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Competitors and Price Decisions
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Competitors and Price Decisions
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Competitors and Price Decisions
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Channel Members and Price Decisions
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Government and Price Decisions
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Cost and Price Decisions
Cost of raw
Cost materials and
supplies
Labor cost
Pricing
Decisions
Advertising Cost
Distribution Cost
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Price Strategy
Cost-based Price
Strategy
Price Demand-based
Strategy Price Strategy
Competition-
based Price
Strategy
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Price Strategy
With a cost-based price strategy, the
Cost-based Price marketer sets prices by computing
Strategy merchandise, service, and overhead
costs, and then adding the desired profit
to these figures
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Price Strategy
• The marketer sets prices in
Competition-
accordance with competitors
based Price
Strategy • Prices may be below the market, at
the market, or above the mar-ket,
depending on customer loyalty,
services provided, image, real or
perceived differences between
brands or stores, and the
competitive environment
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Reference/Recommended Further Reading
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End of Material
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