Marketing mean selling and advertising, like television commercials, newspaper ads, direct-mail offers, sales calls, and Internet pitches. However, selling and advertising are important, they are only two of many marketing functions. Today, marketing must be understood not only in the sense of making sale but in the sense of satisfying customers needs. If the marketers does a good job of understanding consumer needs, develops products that provide superior value, distributes and promotes them effectively, these products will sell very easily. Thus selling and advertising are only part of large marketing mix. Marketing is a process by which individuals obtain what they need and want through creating and exchanging products and value with others. what does this means?
Needs, Wants and Demands
The most basic concept underlying marketing is that of human needs. They include basic physical needs for food, clothing, warmth and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. These needs were not created by marketers; they are a basic part of the human makeup. Wants are the form taken by a human need shaped by culture and individual personality. A person needs food but wants burger, French fries, and a soft drink. When backed by buying power wants become demands. Given their wants and resources, people demand products that add up to the most value and satisfaction
Marketing occurs when people decide to satisfy need and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return.
Retaining and Growing Customers
Satisfied customers are more likely to be loyal customers, and loyal customers are more likely to give the company a larger share of their business.
Customer value and Satisfaction
Attracting and retaining customers can be a difficult task. Customers often face a bewildering array of products and services from which to choose. To attract and keep customers, a company must constantly seek ways to deliver superior customer value and satisfaction.
Satisfied customers make repeat purchases and tell others about their good experiences with the product.
. then delivering more than they promise. As satisfaction increases.
Customers Loyalty and Retention
Highly satisfied customers produce several benefits for the company. Smart companies aim to delight customers by promising only what they can deliver.Customer Value
A customer buys from a firm that offers the highest customer perceived value. Customer perceived value is the customer’s evaluation of the difference between all the benefits and all the cost of a marketing offer relative to those of competing offer.
Outstanding marketing companies go out of their way to keep their customers satisfied. Satisfied customers are less price sensitive. They talk favorably to others about the company and its products and remain loyal for a longer period. so does loyalty. The key is to match customer expectations with company performance.
some controllable and other not. advertising can be used to point out the differences to consumers. Reminder advertising is important for mature products.
. Informative advertising is used heavily when introducing a new product category. Undifferentiated brands-those that closely resemble other brands in their product class (beer. When the product differs greatly from competitors.its keeps consumers thinking about the product. mature brands usually require lower budgets as a ratio to sales. In most cases. low-share brands usually need more advertising spending as percentage of sales. in which a company or indirectly compares its brand with one or more other brands. what are primary demands? Persuasive advertising becomes more important as competition increases. the company next sets its advertising budget for each product. For example. In contrast. Because building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share. managers must rely on judgment.ADVERTISING
convince Advertising is a good way to inform and persuade. brands in a market with many competitors and high advertising clutter must be advertised more heavily to be noticed above the noise in the market. what are selective demands? Some persuasive advertising has become comparative advertising. In this case. soft drinks. persuade or remind. new product typically need large advertising budgets to build awareness and to persuade consumer’s to try the products. the company’s objective is to build selective demand. Market share also impacts the amount advertising needed.
Setting the Advertising Budget
After determining its advertising objectives. measuring the results of advertising spending remains an inexact science. A brand’s advertising budgets often depends on its stage in the product life cycle. Also. Here. and laundry detergents)may require heavy advertising to set them apart. the objective is to build primary demand. Objectives of Advertising can be to inform. How does a company know if it is spending the right amount? Be cause so many factors affect advertising effectiveness. An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period to time.
Frequency & Impact To select media. tone. word and format for executing the message. developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Good advertising messages are especially important in today’s costly and cluttered advertising environment Until recently. The advertiser must next develop a compelling creative concept-or “big idea”-that will bring the message strategy to life in a distinctive and memorable way.
Message Execution The advertiser now has to turn the big idea onto an actual ad execution that will capture the target market’s attention and interest. Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. frequency and impact the advertiser seeks. more imaginative. Just to gain and hold attention. message on television may have more impact than messages on radio because television uses sight and sound.Developing Advertising Strategy
Advertising strategy consists of two major elements: creating advertising message and selecting advertising media. advertising can succeed only if commercials gain attention and communicate well.
Choosing Among Major Media Types Media planners consider many factors when making their media choice.
. For products that need to be demonstrated. the more reach. In general. the advertiser must decide what reach and frequency are needed to achieve advertising objectives.
Deciding on reach. today’s viewers have many more options. Viewers had only a few channels from which to choose.
Creating the Advertising Message No matter how big the budget. The media habits of target consumers will affect media choice-advertisers look for media that reach target consumers effectively. They can avoid ads by watching other cable channels. Frequency is measure of how many times the average person in the target market is exposed to the message. the higher the advertising budget will have to be. television viewers were pretty much a captive audience for advertiser. The creative people must find the best style. more entertaining and more rewarding to consumers
Message Strategy Thus. But with the growth in cable and satellite TV and remote control units. today’s advertising messages must be better planned.
television vehicles include Sony. Continuity means scheduling ads events evenly within a given period. For example. Advertisers should choose the pattern of the advertisement. price and availability. and twice the normal amount in a third area. Hallmark advertises its greeting cards only before major holidays. Thus. Sales are affected by many factors besides advertising-such as product features. Cost is another major factor in media choice.
EVALUATING ADVERTISEMENT The sales effects of advertising are often harder to measure. For example. For example. 52 ads could either be schedule at one per week during the year or pulsed in several bursts. to test the effects of different advertising spending levels. For example. then differences in sales in the three areas could be related to advertising level.
Deciding On Media Timing The advertiser must also decide how to schedule the advertising over the course of a year. If the three market areas are similar and if all other marketing efforts in the area are the same. A message with a lot of technical data might require magazines. Famina. network television is very expensive. etc. fashions are best advertised in color magazines and automobile performance is best demonstrated on television. Zee. The idea behind pulsing is to advertise heavily for a short period to build awareness that carries over to the next advertising period.
.. Pulsing means scheduling ads unevenly over a given time period.for example. direct mailing or an online ad and Web site. India Today.So will the nature of the product. It could spend the normal amount in one market area. half the normal amount in another area. Magazine vehicles include Newsweek.
Selecting Specific Media Vehicle The media planner now must choose the best media vehicles-specific media within each general media type. Star Plus etc. Coca-Cola could vary the amount it spends on advertising in different advertising in different market areas and measure the differences in the resulting sales levels. whereas newspaper or radio advertising cost must less but also reaches fewer consumers.
The main consumer promotion tools include sample. Sampling is the most effective-but most expensive-way to introduce a new product. An executive who buys a new Sony laptop gets a free carrying case. Sales promotion includes a wide variety of promotion tools designed to stimulate earlier or stronger market response.SALES PROMOTION
Sales promotion consists of short-term incentives to encourage purchase or sales of a product or service. price packs. cash refunds. Thirdly. Rapid Growth of Sales Promotion Factors to the rapid growth of sales promotion are Firstly. the company charges a small amount to offset its costs. externally. Coupons can stimulate sales of mature brands or promote early trial of a new brand. who then refunds part of the purchase price by mail. ranging from toys included with kids products to phone cards and CDs. and promotion is viewed as an effective short-run sales tool. Some samples are free. Price packs can be single packages sold at a reduced price (such as two for the price of one). consumers have become more deal oriented and are demanding more deals from manufactures. The consumer sends as “proof of purchase” to the manufacturer. Coupons are certificates that give buyers a saving when they purchase specified products. product managers face greater pressures to increase their current sales. advertising efficiency has declined because of rising costs and media clutter. or through the mail. for others. Finally. shopping bags. Whereas advertising offer reasons to buy a product or service. outside the package (on-pack). coupons. etc. the company faces more competition and competing brands are less differentiated. sales promotion offers reasons to buy now. calendars. like pens.
.. Secondly. A premium may “come inside the package (in-pack). Advertising specialties are useful articles imprinted with an advertiser’s name that are given as gifts to consumers. Competitors are therefore using sales promotion to help differentiate their offers. Cash refund offers (or rebates) are like coupons except that the price reduction occurs after the purchase rather that at the retail outlet. or two related products banded together (such as a toothbrush and toothpaste) Premiums are goods offered either free or at low cost as an incentive to buy a product. Patronage Rewards Are cash or other awards offered for the regular use of a certain company’s product or services. Samples Samples are offers of a trial amount of a product. inside the company.
packaging. and other attributes have all been combined carefully to deliver the core benefit. Sony camera is an actual product. airline etc. An experience occurs when a company intentionally use goods and services to engage individual customer in a way that creates a memorable event. high quality way to capture important moments. brand name and packing. events. Services are a form of product that consist of activities.
Levels of product and services
Product planners need to think about product and services on three levels. which addresses the question What is the buyer really buying? At the second level. SERVICES AND BRANDING STRATEGIES
What is a product?
A product is anything that can be offered to the market for use or consumption and that might satisfy a want or a need. but experiences are as distinct from services as services are distinct from goods. benefits or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything. This offering becomes the basis upon which the company builds profitable relationship with customers. Services and Experience
Marketing mix planning begins with formulating an offering that brings value to target customers and satisfies their needs. many companies are moving to new level in creating value for their customers. As product and services become more and more commoditized. parts.
Products. product planner must turn the core benefit into actual product. they are developing and delivering total customer experience.PRODUCT.a convenient. services. quality level. Eg. Experience are sometimes confused with services. Eg. styling. They are buying memories. experience are memorable. To differentiate their offer. hotel. They need to develop product and service feature. Its name. Companies that market experiences realize that customers are really buying much more than just products and services.
. Banking. Whereas products and services are external. Whereas products are tangible and services are intangible. design. Each level adds more customer value. or mixes of these. places. experience exist only in the mind of the individual. The most basic level is the core benefit. ideas. Products include physical object. features.
quick repair service when needed.consumer products and industrial products. newspapers.
Product and Service Classification
Products fall into two broad classes based on the types of consumers that use them . consumers spend much time and effort in gathering information and making comparisons. Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Thus. and marketers place them in many locations to make them readily available when customers need them. the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought. Examples include specific brands and types of cars.
. Like new innovations are unsought until the consumer becomes aware of them through advertising. and fast food. Specialty Products are consumer products with unique characteristics or brand identification. designer clothes.
Industrial Products are those purchased for further processing or for use in conducting a business. Examples include soap. Marketers usually classify these products further as Convenience products Are consumer products that the customer usually buys frequently. Sony and its dealers also gives buyer a warranty on parts .Finally.
Consumer products are product bought by final consumers for personal consumption. product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. candy. hotel services etc. Convenience products are usually low priced. Sony must offer more than just a camera. Examples include furniture. Shopping products When buying shopping products and services. clothing. instruction on how to use the camera.
maintain. Quality has a direct impact on product or service performance. and Ideas
In addition to tangible products and services in recent years marketers have broadened the concept of a product to include other market offerings like persons. Professionals such as Doctors lawyers’ accountants and architects market themselves in order to build their reputations and increase business. Other social marketing efforts include environmental campaigns to promote wild life protection . Today’s presidents market themselves. and overeating. states. Places.Persons. Here. drug abuse. maintain or change attitudes or behavior toward particular people. Product quality is one of the marketer’s major positioning tools. Cities. new residents conventions and company offices and factories. and conservation. Instead
. People can also be thought of as products. alcoholism. clean air. Ideas can also be marketed. and their platforms to get needed votes and program support. product quality means performance quality . places and ideas. Creating or associating with well-known personalities often helps these organizations achieve their goals better. or change attitudes or behavior toward particular places. These benefits are communicated and delivered by product attributes such as quality features design.the ability of a product to perform its functions. Product quality has two dimensions level and consistency. In developing a product the marketer must first choose a quality level that will support the product’s position in the target market. Such programs include public health campaigns to reduce smoking. This area has been called social marketing. regions and even entire nations compete to attract tourists. their parties. Place marketing involves activities undertaken to create.
Developing Product And Service
Developing and marketing a product and service involves important decision about Product Attributes Branding Packing Labeling
Developing a product or service involves defining the benefits that it will offer. thus it is closely linked to customer value and satisfaction. Person marketing consists of activities undertaken to create. Companies rarely try to offer the highest possible performance quality level since only few customers want or can afford the high levels of quality offered in products.
Features are a competitive tool for differentiating the company’s product from competitor’s products. Brand names help consumers identify products that might benefit them.
. and quality each time they buy. Product Features A product can be offered with varying features The company can create higher level models by adding more features.
Perhaps the most distinctive skill of professional marketers is their ability to create maintain protect.
Packaging involves designing and producing the container or wrapper for a product. The company should periodically survey buyers who have used the product and ask these questions: How do you like the product? Which specific features of the product do you like most? Which features could we add to improve the product? The answer provide the company with a rich list of feature ideas. it can include a shipping package necessary to store.freedom from defects and consistency in delivering a targeted level of performance. Labeling . identify and ship the product (a corrugated box carrying six dozen tubes of colgate). Brands also tell the buyer something about product quality. The package includes a product’s primary container (the tube holding colgate total toothpaste). i. and enhance brands of their products and service.e. It may also include a secondary package that is thrown away when the product is about to be used (the cardboard box containing the tube of Colgate). Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks from attracting attention. to make the sale. Branding helps buyers in many ways. High quality also can mean high levels of quality consistency. A brand is a name that identifies the maker or seller of a product or service.companies choose a quality level that matches target market needs and the quality levels of competing products. Buyers who always buy the same brand know that they will get the same features.printed information appearing on or with the package is also part of packaging. Finally. to describing the product.
Product Design Another way to add customer value is through distinctive product design. benefits. Good design contributes to a products’ usefulness as well as to its looks. In recent times however numerous factors have made packaging an important marketing tool.
everything that the product or service means to consumers. Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. names of well known celebrities or characters from popular movies and books. A measure of a brands equity is the extent to which customers are willing to pay more for the brand. where it was made.
Brand are more than just names and symbols. However some companies license names or symbols previously created by other manufacturers. Sellers of children’s products attach an almost endless list of character names to clothing toys.
. its contents. Brands vary in the amount of power and value they have in the marketplace. The label might also describe several things about the product. who made it. any of these can provide an instant and proven brand name. A powerful brand has high brand equity.
Most manufacturers take years and spend millions to create their own brand names. how it is to be used and how to use it safely. outlasting the company’s specific products and facilities.Labeling
Labels may range from simple tags attached to products to complex graphics that are part of the package. (3) The brand name should be distinctive.
Brand Name Selection
It begins with a careful review of the product and its benefits. Finally the label might promote the product through attractive graphics. and proposed marketing strategies. (2) It should be easy to pronounce recognize and remember. They perform several functions. Primary function of label is to identifies the product or brand. For a fee. when it was made. Brands represent consumers perceptions and feelings about a product and its performance .
BRANDING STRATEGY: BUILDING STRONG BRANDS
Some analysts see brands as the major enduring asset of a company. (4) It should be capable of registration and legal protection. the target market. Desirable qualities for a brand name include the following (1) It should suggest something about the product’s benefits and qualities.
These include advertising. Brand Extensions : A brand extension involves the use of a successful brand name to launch new or modified products in a new category Barbie Doll brand into new categories ranging from Barbie home furnishings Barbie cosmetics. medical and law practices. Also. churches. employment services. The company must put care into managing these touch points. And if a brand extension fails it may harm consumer attitudes towards the other products carrying the same brand name. Multibrands Companies often introduce additional brands in the same category. customers come to know a brand through a wide range of contacts and touch points. hospitals. Any of these experiences can have a positive or negative impact on brand perceptions and feelings. Many companies go even further by training and encouraging their distributors and dealers to serve their customers well. banks. forms colors ingredients. word of mouth. Private not for profit organizations offer services through museums. Line Extensions : Line extensions occur when a company introduces additional items in a given product category under the same brand name. Today. insurance companies. However. charities. A brand extension gives a new product instant recognition and faster acceptance.Brand development
A company has four choices when it comes to developing brands. A large number of business organizations offer services like airlines. and Barbie electronics to Barbie books Barbie sporting goods. telephone interactions. company web pages etc. the company should build pride in its employees regarding their product and services so that their enthusiasm will spill over to customers. personal interactions with company people..
Brands are not maintained by advertising but by the brand experience. Governments offer services through courts. or package sizes. consulting firms. New Brands A company may create a new brand name when it enters a new product category for which none of the company’s current brand names is appropriate. Finally companies need to periodically audit their brands strengths and weaknesses. the extension may confuse the image of the main brand. hotels. It also saves the high advertising costs usually required to build a new brand named. personal experience with the brand.
Service industries vary greatly.
. such as new flavors.
But in service marketing. Service variability means that the quality of services depends on who provides them as well as when. In contrast services are first sold then produced and consumed at the same time. Service firms often design strategies for producing a better match between demand and supply Hotels and resorts charge lower prices in the off season to attract more guests. tasted. internal marketing must proceed external marketing. people. products are fairly standardized and can sit on shelves waiting for customers. Service perish ability means that services cannot be stored for later sale or use. price. where and how they are provided.
The Service-Profit Chain
Successful service companies focus their attention on both their customers and their employees. equipment and communications that they can see. Airline passengers have nothing but a ticket and the promise that they and their luggage will arrive safely at the intended destination hopefully at the same time. Whether the providers are people or machines. Internal marketing means that the service firm must effectively train and motivate its customer – contact employees and supporting service people to work as a team to provide customer satisfaction. Service marketing requires more than just traditional external marketing. Interactive marketing means that service quality depends heavily on the quality of the buyer – seller interaction during the service encounters. In product marketing. For example people undergoing cosmetic surgery cannot see the result before the purchase. In a product business. the customer and front-line service employee interact to create the service. Service marketing also requires internal marketing and interactive marketing.The Nature and Characteristics of a Service
Service intangibility means that services cannot be seen.
Marketing strategies for Service Firms
Just like manufacturing businesses. service quality depends on both the service deliverer and the quality of the delivery. felt heard or smelled before they are bought. because services differ from tangible products. Service inseparability means that services cannot be separated from their providers. Effective interaction. They understand the service-profit chain. good service firms use marketing to position themselves strongly in chosen target markets. Infact. they often require additional marketing approaches. product quality often depends little on how the product is obtained. Thus service providers must interact effectively with customers to create superior value during service encounters. which links service firm profits with employee and customer satisfaction. Physical goods are produced then stored later sold and still later consumed. in turn depends on the skills of front line service employees and on the support processes backing these employees. However.
. But in a service business. Buyers draw conclusions about quality from the place.