Ferrell Hirt Ferrell BUSINESS A CHANGING WORLD EIGHTH

part Marketing: Developing Relationships 5 Chapter 11 Customer-Driven Marketing Chapter 12 Dimensions of Marketing Strategy Chapter 13 Digital Marketing and Social Networking FHF 12 -2

The Marketing Mix Keys to developing effective marketing strategy ü Maintain right marketing mix ü Satisfy target market ü Long-term customer relationships Ø Successful companies have at least one dimension of value that surpasses all others Ø The Marketing Mix Song FHF 12 -3

Product [ A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumers ] The most visible variable of the marketing mix FHF 12 -4

Developing New Products § § § Idea development New idea screening Business analysis Product development Test marketing Commercialization FHF 12 -5

Classifying Products: Consumer Products Convenience Products § Purchased without doing research into price § Widely available § Often for immediate consumption v Example: A gallon of milk …continued on next page FHF 12 -6

Classifying Products: Consumer Products Shopping Products § Consumer has compared competitors’ prices and has shopped around done § Price, features, quality, style, service and image all influence the decision to buy v Example: clothing, furniture …continued on next page FHF 12 -7

Classifying Products: Consumer Products Specialty Products § Require the greatest level of research and shopping effort § Not willing to accept substitutes § Consumers know exactly what they want and go out of their way to find it § Price not the strongest consideration v Example: designer clothing, art, antiques FHF 12 -8

Classifying Products: Business Products Ø Used directly or indirectly in the operation or manufacturing processes of a business § § § Raw materials Major equipment Accessory equipment Component parts Processed materials Industrial services FHF 12 -9

Product Line and Product Mix Product Line § Group of closely related products that are treated as a unit because of a similar marketing strategy, production, or end-use § Coca Cola's Product Mix § All the products offered by the company FHF 12 -10

The Product Life Cycle FHF 12 -11

Identifying Products Branding § The process of identifying products § Name § Term § Symbol § Design Trademark • A brand registered with U. S. patent and trademark office • Protected from use by any other firm FHF 12 -12

Top 10 Brands

http: //brandirectory. com/brands/c ountry/united_states

Brand Categories v Manufacturer Brands § Initiated and owned by the manufacturer to identify products from production to point of purchase v Private Distributor Brands § Cost less than manufacturer brands; owned and controlled by wholesaler or retailer v Generic Products § No brand name often come in simple packages and carry their generic name FHF 12 -13

Packaging External container that holds & describes the product § § Protection Economy Convenience - Via Promotion – Cosmetics FHF 12 -14

Labeling The presentation of important information on the package (often by law) ü ü ü ü Ingredients or content Nutrition facts (calories, fat, etc. ) Care instructions Suggestions or use (such as recipes) The manufacturer’s address and toll-free number Website Other useful information FHF 12 -15

Product Quality [ The degree to which a good, service, or idea meets the demands and requirements of customers ] FHF 12 -16

Pricing Strategy Four Common Pricing Objectives 1. Maximize profits and sales 2. Boost market share 3. Maintain the status quo 4. Survival FHF 12 -17

Specific Pricing Strategies New Product Pricing § Price skimming - Ipad’s (Profit) § Penetration pricing – (Market Share) Psychological Pricing § Even/odd – $19. 99 § Symbolic/prestige pricing – Starbuck’s Lattes Price Discounting § Quantity discounts § Seasonal discount § Promotional discounts § http: //smallbiztrends. com/2008/08/8 -pricing-strategies-you-can-implement -right-now. html FHF 12 -18

Distribution Strategies Marketing Channel § A group of organizations that moves products from their producer to consumers Retailers § Buy products from manufacturers and sell them to customers for uses other than resale § Many now compete online Wholesalers § Intermediaries that buy from producers or other wholesalers and sell to retailers § Also called middlemen FHF 12 -19

Supply Chain Management Creates alliances between channel members § Channels for consumer products § Channels for business products § More likely to be direct marketing channels FHF 12 -20

Channels for Consumer Products FHF 12 -21

Intensity of Market Coverage Ø Depends on buyer behavior, the nature of the target market and competition Intensive § Makes a product available in as many outlets as possible Selective § Uses only a small proportion of all available outlets to expose products Exclusive § Exists when a manufacturer gives a middleman the sole right to sell a product in a defined geographic territory FHF 12 -22

Physical Distribution Ø Includes all the activities necessary to move products from producers to customers § § Inventory control Transportation Warehousing Materials handling FHF 12 -23

Physical Distribution Transportation § The shipment of products to buyers § Railroads, trucks, air and pipelines § Factors to consider are: cost, capability to handle the product, reliability and availability Warehousing § Design and operation of facilities to receive, store and ship products Materials Handling § Physical handling and movement of products in warehouses and transportation § Can increase efficiency and reduce costs FHF 12 -24

Distribution Strategy § The least flexible element of marketing mix § Commits resources and establishes contractual relationships § Difficult to change § Expansion into new markets may require new distribution strategy FHF 12 -25

Promotion Strategy § Goal is to communicate with individuals, groups and organizations - create awareness - inform - create desire - encourage trial - build loyalty § Encourages marketing exchanges § Used to influence opinions and attitudes toward organizations, people, or causes FHF 12 -26

The Promotion Mix § § Advertising Personal Selling Publicity Sales Promotion FHF 12 -27

Integrated Marketing Communication [ The process of coordinating the promotion mix elements and synchronizing promotion as a unified effort ] FHF 12 -28

Advertising Ø A paid non-personal communication communicated through mass media § Advertising campaign involves designing a series of advertisements and positioning them to reach a target audience § § Online advertising is increasing Frontier Airlines Interviews Ad Cracker. com Effective Advertisements Who are they targeting? What is appealing about these? FHF 12 -29

Advertising Campaign § Designing a series of ads and placing them in various media to reach a particular target audience § Product’s features, uses and benefits affect the message § Characteristics of the target audience influence content and form § Advertisers use words, symbols and forms familiar to the target audience to communicate effectively § (Can be expensive, consumers may ignore) § (Marketer has control over the message and where it appears) § Best Commecials 2010 2011 FHF 12 -30

Personal Selling Ø Direct two-way communication with buyers/potential buyers - (high cost per contact but direct contact and immediate feedback) Avon uses personal selling § Targets women as customers and salespeople § Personal interaction with customers § Salespeople earn commissions § Flexible hours § The internet is an increasingly important component FHF 12 -31

Personal Selling is a Six-step Process 1. 2. 3. 4. 5. 6. Prospecting Approaching Presenting Handling objections Closing Following up FHF 12 -32

Publicity A non-paid, non-personal communication through mass media channels influencing stakeholders(can be free) § § § Mainly informative or descriptive Press releases Special events Can be extremely important for a company (can be + or - ) Buzz marketing: marketers attempt to create a trend through publicity and viral marketing FHF 12 -33

Viral Marketing • This was one of a series of ads by John West Salmon that appeared on the Internet in late 2000. Since their groundbreaking debut, the “Bear Fight” videos have gone on to attract an astonishing 300 million Internet views according to the BBC, and it is not difficult to see why. It’s handheld, low budget, realistic feel would become synonymous with the term “viral” for years to come Viral Marketing Examples

Sales Promotion Direct inducements to persuade buyers to purchase products • • • ü ü Coupons Contests Rebates Free Trials Examples of Sales Promotions Stimulates customer purchasing Enhances other promotional efforts Generally less expensive than advertising But may not create loyalty! FHF 12 -34

Promotion Strategies FHF 12 -35

Objectives of Promotion is only one element of the marketing strategy § Must be tied to goals of firm § Stimulate demand § Stabilize sales § Inform § Remind § Reinforce customers Promotional Positioning § To create and maintain an image of a product in buyer’s minds FHF 12 -36

Guerilla Marketing An advertising strategy in which low-cost unconventional means (graffiti, sticker bombing, flash mobs) are utilized - Often in a localized fashion or large network of individual cells, to convey or promote a product or an idea. - www. youtube. com/watch? v=NC_Ael. U 2 qp. A http: //www. youtube. com/watch? v=NC_Ael. U 2 qp. A FHF 12 -34

Marketing (how creative are you? ) • Marketing Activity – Object (or) Duct Tape Duckbrand Website Objective: To reinforce marketing strategies and promotional strategies! 1. Create your NEW PRODUCT! (using the product or tape given you) (Remember: you cannot have a product for what is was originally intended for) 2. Define Your Target Market for your Product 3. Give your NEW product a catchy name (Brand Awareness) AND Write a slogan OR Draw an Ad or Create a Radio/TV ad