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Unit 2

Marketing Process Topic highlight


Marketing Mix and traditional 4Ps Modern Marketing Mix with additional 3Ps Marketing Planning, Implementation and control

PRODUCT

PRICE

The Marketing Mix


PROMOTION

PLACE

Four Ps and Four Cs and Four Vs of Marketing

Product Promotion Price Placement

Customer Communication Cost Convenience

Validity Vogue Value venue

Solution Information Value Accessibility

Marketing Mix
When marketing their products firms need to create a successful mix of:

the right product sold at the right price in the right place using the most suitable promotion.

The Marketing Mix


The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives 7Ps Price, Product, Promotion, Place, People, Process, Physical Environment Traditional 4Ps extended to encompass growth of service industry

Product: Goods or services a company offers to its target market. What should the product mix look like? Which features/benefits should the individual product offer? Product variety Products quality

Products features Brand Name Packaging Services

1. Product:
Product refers to the goods and services that firms offer to their customers. Firms must place sufficient importance to the product/service as well as the other aspects associated with the product that attract customer attention. Some elements of product/service that require attention for a successful business are: quality, features, options, services, warranties, brand name, safety, packaging, repairs and Support. The product should be designed keeping the customer needs and requirements in mind.

Product
Product Decisions

Branding

Quality
Benefits offered

Features

We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer

Product

Marketing Mix of NIKE


Clothes

Shoes

accessories

Bags

$ 40

$ 65

$ 65

Sporting goods

EYEWEAR

Watches

Pricing
Pricing is the only mix which generates a turnover for the organisation. The remaining 3ps are the variable cost for the organisation. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship.

Price
Amount of money customers have to pay for a companys product/service At which price should a product be offered cheap, expensive, medium-priced/ Which pricing approach cost-based, market-based, competition-based? Which factors affect the price? Discounts Allowance Credit period Credit terms

Price refers to the cost of a particular product or service. Price plays an important role in customers buying decision. Therefore careful attention should be paid while determining the price of a particular product/service. If the price is too high customers would opt for a product which has the similar features but is priced relatively lower than the one offered by a particular firm.

However, incase the price determined by a firm is lowest among the competitors; customers might consider it as a signal of low quality. Therefore, firms must price the product in a way which reflects the appropriate position of the product in the market. This P of the marketing mix is highly important for the success of the business as it is the one that determines the revenues generated. Price must cover the costs incurred and contribute to the firms image by communicating the perceived value.

Promotion

Advertising Sales promotion Public relation Publicity Personal Selling

Promotion
Advertising Public Relations Promotional Mix Sales Promotion Personal Selling Direct Mail Internet/ E-commerce

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional mix can consist of:

Promotion:
Promotion refers to the awareness created of the introduction of a new product and availability of an already existing product by means of advertising and selling activities. The main objective of promotion is to make customers aware of product features, its uses and benefits. Promotion activities help the firms to position their products in the right way in the market to reach the target customers.

Effective promotional activities consist of a clear and simple message which is directly targeted at a specific group of people, reached by means of an appropriate medium like television or print adverts. The message should be consistent with the overall marketing image of the firm and should reach the target audience and generate the desired response. Promotional activities involve advertising, personal selling, public relations and sales promotions.

Place
The means by which products and services get from producer to consumer and where they can be accessed by the consumer
The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?)

Place refers to the distribution channels used to get a firms products from the manufacturer/service provider to the end customers. Place is also known as channel, distribution, or intermediary. For business to be successful, it is important that the product/service offerings are at the right place at the right time. Therefore great importance should be placed in determining the distribution medium.

The selection of distribution method should be carefully made keeping in mind the target audience and the positioning of the product in the market.

Place
Direct Distribution Indirect Distribution
Manufacturer

Manufacturer

Retailer Consumer Consumer

Place

Additional Three Ps in marketing


People

Physical evidence

Process

People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with.

People - People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.

Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. Many British organisations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards.

Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.

An example can be a customer walking in to Mc Donald's and ordering a meal. The meal is delivered within 5 minutes. The steps followed by the service provider for providing its service so efficiently is the process being followed by it.

Process Refers to the systems used to assist the organisation in delivering the service. Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery?

Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company.

Physical Evidence Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down!

Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service.

Physical (evidence) - It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

Developing an Effective Marketing Mix


Marketing Mix is vey vital SWOT analysis is more important to know more about Marketing Mix Focus on Four specific areas Assess its position in market

SWOT
A widely used framework for organizing and using data and information gained from situation analysis Encompasses both internal and external environments One of the most effective tools in the analysis of environmental data and information

A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix whats a bit worn, whats on the verge of breaking down, or whats already broken and needs replacement--so that you can keep the business hummingeven better than it has in the past.

SWOT description
A SWOT analysis generates information that is helpful in matching an organizations or a groups goals, programs, and capacities to the social environment in which they operate It is an instrument within strategic planning When combined with a dialogue, it is a participatory process

SWOT
Factors affecting an organization can usually be classified as: Internal factors
Strengths (S) Weaknesses (W) Strengths Weaknesses

External factors
Opportunities (O) Threats (T) Opportunities Threats

SWOT: internal factors


Strengths
Positive tangible and intangible attributes, internal to an organization. They are within the organizations control

Weaknesses
Factors that are within an organizations control that detract from its ability to attain the core goal. In which areas might the organization improve?

SWOT: external factors


Opportunities
External attractive factors that represent the reason for an organization to exist and develop. What opportunities exist in the environment which will propel the organization? Identify them by their time frames

Threats
External factors, beyond an organizations control, which could place the organizations mission or operation at risk. The organization may benefit by having contingency plans to address them should they occur Classify them by their seriousness and probability of occurrence

Marketing Planning implementation and Control Marketing plan is functional plan They support to have better coordination among departments.

SWOT OF a Retail Shop


Strengths Unique brands protected by sole supply agreements Successful relationship marketing, and Innovative sales techniques Weaknesses Small store size and inability to find an expansion, resulting in stocking a limited product range Manager has limited industry experience and industry knowledge Threats Changing fashion trends may shift consumer interest in our product range Exchange rate variation may impact costs Rents increasing above CPI putting pressure on our margins Center owner shifting us within the center

Opportunity Backward integration in the supply chain to include importing directly Increased geographic coverage Leverage the growth of the internet to enhance business

1.

SWOT OF DELL COMPUTER


Dell Inc is one of the larges multinational technology corporation that develops, manufacture, sell and support personal computer, laptops and other computer peripherals.

Strength Customer oriented marketing strategies. Well-Known for online selling of Computers. Listed in the fortune 500 companies as the 25th largest company. Dell Company employs more than 76000 thousand people. Provide quality PCs, Laptops and computer peripherals at low price. Low manufacturing cost. Dell offer computers with AMD and Dell processor. Dell has nine of manufacturing plants. 24X 7 Customer support. Offer wide range of PC, Server, Laptops, Monitors and LCDs, Data storage devices, network switches and software.

Weaknesses Elimination of bonuses in 2006 to increase the company financial performance. Closure of Dells biggest call center in April, 2003 terminating 1100 employees. On January 8, 2009 Dell announced the closing of its manufacturing plant in Limerick, Ireland with the loss of 1,900 jobs and the shift of production to its plant in Poland. Dell not able to attract the students of schools and colleges, this segment earn only 5% of total revenues. Dell have no proprietary technology, the currently used technology by dell are shared by the other major competitors. Dell is dependent on its suppliers No t easily available of repair parts of equipments for repairs.

Opportunities India, Pakistan and Bangladesh are the untapped markets. Market penetration in education and Government markets. Cost reduction in latest technology. Partnership or acquiring of suppliers. Dell has opportunity to sell computer directly to retailers.

Threats Fluctuation in currency outside US. Major competitors in the market. Most of the countries are hit by recession which may result in the reduction of revenues. Bargaining of Suppliers. Rapid change in technology obsoletes the product in small span of time.

Marketing planning, implementation and control Contents of marketing plan Executive Summary: brief summary of plan that helps for busy executives to get points very quickly. 1. Analyze the current market situation:
Intended market and market segmentation Consumer buying behavior for certain products Marketing environment (supportive, deceptive)

Major competitors and their marketing strategies 2. PEST Analysis Assessment of external environment to find opportunity and threats. 3. Objectives and Issues: Marketing objectives they want to achieve and issues they may affect them.

Marketing objectives can include setting the number of new clients you would like to acquire, the number of people you would like to reach, or the amount of income you would like to generate. Be realistic and practical in establishing your goals. Take a good look at the available skills and resources that you can commit to implement and integrate your goals into your marketing plan effectively. Study the budget requirements for the strategies you select and plan accordingly.

4. Marketing Strategies Segmentation, Targeting and positioning Four Ps of marketing Planned activities
Programs to be undertaken 1 2 3 Responsibility for monitoring Time Cost

5. Marketing Budget

6. Control

By monitoring results, you determine which of your marketing strategies are working and which are not. Identify strategies that generate leads and sales. This involves tracking and evaluating customers responses to each marketing strategy

Survey or interview regular users for comments about why they find a service important. As you get to know your repeat clients better, meet with them for detailed feedback and ask them for ideas and suggestions about how you can introduce your products and services to more prospects who are just like them

I. MARKET ANALYSIS A. Target Market - Who are the customers? 1. We will be selling primarily to (check all that apply): Market Segment Total Percent of Business a. Private sector % b. Wholesalers % c Retailers % d. Government % e. Other %

2. We will be targeting customers by: a. Product line We will target specific lines _________________ b. Geographic area? Which areas?_________________ c. Sales? We will target sales of _________________ d. Industry? Our target industry is_________________
e. Other? _________________ 3. How much will our selected market spend on our type of product or service this coming year? $_______________

B. Business Competition 1. Who are our business competitors? NAME _____________________________________ ADDRESS _____________________________________ _____________________________________ Years in business ___________________

2. We will be targeting customers by: Market share ___________________ Price/Strategy ___________________ Product/Service Features ___________________

2. How competitive is the market? High Competitive Market ____________________ Medium Competitive Market ____________________ Low Competitive Market ____________________

3. List below your strengths and weaknesses compared to your business competition (consider such areas as location, size of resources, reputation, services, personnel, etc.): Strengths Weaknesses 1.___________ 1._________ 2.__________ 2.___________ 3.___________ 3.________

C. Market Environment 1. The following are some important economic factors that will affect our product (such as country growth, industry health, economic trends, taxes, rising energy prices, etc.): ___________________________________________ ___________ 2. The following are some important legal factors that will affect our market: ___________________________________________ __________

3. The following are some important government factors: _______________________________________ _______________ 4. The following are other environmental factors that will affect our market, but over which we have no control: _____________________________________ _________________

II. PRODUCT OR SERVICE ANALYSIS A. Description 1. Describe here what the product/service is and what it does: _____________________________________ _________________

B. Comparison 1. What advantages does our product/service have over those of the competition (consider such things as unique features, patents, expertise, special training, etc.)? _____________________________________ _________________ 2. What disadvantages does it have?

C. Some Considerations 1. Where will you get your materials and supplies? _____________________________________ _________________ 2. List other considerations: _____________________________________ _________________ _____________________________________ _________________

III. MARKETING STRATEGIES - MARKET MIX A. Image 1. First, what kind of image do we want to have (such as cheap but good, or exclusiveness, or customer-oriented, or highest quality, or convenience, or speed, or ...)? _____________________________________ _________________

B. Features 1. List the features we will emphasize: a.____________________________________ _______________ b.____________________________________ _______________ c.____________________________________ _______________

C. Pricing 1. We will be using the following pricing strategy: a. Markup on cost ____ What % markup?______ b. Suggested price ____ c. Competitive ____ d. Below competition ____ e. Premium price ____ f. Other ____

2. Are our prices in line with our image? YES___ NO___ 3. Do our prices cover cost and leave a margin of profit? YES___ NO___ D. Customer Services 1. List the customer services we provide: a. ----------- b--------------. c. --------------------_____________________________________

2. These are our sales/credit terms: a. _____________________________________ ________ b. _____________________________________ ________ c.

3. The competition offers the following services: a. _____________________________________ _________ b. _____________________________________ _________

E. Advertising/Promotion 1. These are the things we wish to say about the business: _____________________________________ _________________ _____________________________________ _________________

. We will use the following advertising/promotion sources: 1. Television ________ 2. Radio ________ 3. Direct mail ________ 4. Personal contacts ________ 5. Trade associations ________

6. Newspaper ________ 7. Magazines ________ 8. Yellow Pages ________ 9. Billboard ________ 10. Other___________ ________ 3. The following are the reasons why we consider the media we have chosen to be the most effective: -----------------------------------