MARKETING AND THE MARKETING MIX 4 PS MARKETING

MARKETING AND THE MARKETING MIX (4 P’S)

MARKETING: • THE ACTIVITIES REQUIRED TO PROVIDE A PRODUCT OR SERVICE TO SATISFY A CUSTOMER'S NEEDS OR WANTS

TARGET MARKET • ALL THE CHARACTERISTICS OF THE MARKET SEGMENT (CUSTOMERS) THAT YOU ARE SELLING TO.

MARKETING MIX Product Price What product(s) or service(s) should we sell? What are the pricing objectives? How should product/service be branded? What is the best positioning? Pro e ir c P du ct How much should we charge? Target Market Place Pl Where, when and how will consumers access products? How will we distribute? e ac Pro mo Promotion tio n What value does our product add for consumers? What is the best way for us to convey our message to consumers?

(4 PS) 4 PS

MARKETING MIX (4 P’S) 1. PRODUCT/SERVICE – THE ACTUAL PRODUCT, (DESIGN, COLOUR, MATERIALS, TASTE, SCENT) OR SERVICE THE COMPANY SELLS.

MARKETING MIX (4 P’S) 2. PLACE (CHANNELS OF DISTRIBUTION) THE METHODS OF HOW GOODS OR SERVICES ARE DISTRIBUTED TO AND REACH THE CONSUMER (EX. TRANSPORTATION AND STORES).

MARKETING MIX (4 P’S) 3. PRICE – • HOW MUCH IT COSTS TO MAKE? • VARIABLE AND FIXED COSTS • DESIRED PROFIT

MARKETING MIX (4 P’S) 4. PROMOTION – • INCREASE AWARENESS TO POTENTIAL CUSTOMERS • CONVINCE CUSTOMERS THE PRODUCT/SERVICE IS BETTER THAN ANYONE ELSE’S (COMPETITORS). • BRANDING

(4 PS) PRODUCT Product/Service Planning – the process through which a businesses makes decisions about the features needed to sell their products, service or ideas.

PRODUCT MIX Includes all the different products that a company makes or sells. What company makes these products?

DEVELOPING EXISTING PRODUCTS Line Extensions – new product lines, items, or services Original Product Newer Products

DEVELOPING EXISTING PRODUCTS Product Modifications – an alteration in a company’s existing product

DELETING A PRODUCT OR PRODUCT LINE • OBSOLESCENCE • LOSS OF APPEAL • REPLACEMENT WITH NEW PRODUCTS • LACK OF PROFIT

PRODUCT PACKAGING • PROTECT PRESERVE PRODUCT • SAFETY FOR PRODUCT/ CONSUMER • CONVENIENCE FACTORS FOR RETAILER AND CONSUMER • PRODUCT LABELING- SAFETY AND USE INSTRUCTIONS • UNIVERSAL PRODUCT CODE (UPC) • PRODUCT PROMOTION – THE SILENT SELLER

(4 PS) PLACE DISTRIBUTION • THE PATHS OF OWNERSHIP THAT GOODS FOLLOW AS THEY PASS FROM THE PRODUCER TO THE CONSUMER • IN OTHER WORDS…. HOW A PRODUCT GETS FROM THE PRODUCER TO THE CUSTOMER.

WHOLESALERS • THE SELLING OF GOODS IN LARGE QUANTITIES TO BE RETAILED BY OTHERS.

RETAILERS • A BUSINESS OR PERSON THAT SELLS GOODS/ SERVICES TO THE CUSTOMER (AS OPPOSED TO WHOLESALER OR DISTRIBUTOR)

SPECIALTY CHANNELS • ANY INDIRECT CHANNEL OF DISTRIBUTION THAT DO NOT INVOLVE A RETAIL STORE. • EX: DISTRIBUTORS, VENDING MACHINES, INTERNET, CATALOGUES, TV

MODES OF TRANSPORTATION Trains Trucks Planes Pipeline Ships

DIRECT DISTRIBUTION • DIRECT LINK BETWEEN THE PRODUCER AND THE CONSUMER PRODUCER • DIRECT DISTRIBUTION IS MORE COMMON THAN IT USED TO BE. WHY? CONSUMER

INDIRECT DISTRIBUTION • INTERMEDIARIES TAKE POSSESSION OF THE GOODS, ADD A MARK-UP, AND THEN RESELL THEM TO CONSUMERS. • IMPORTERS/ MANUFACTURE RS • WHOLESALERS • RETAILERS • CONSUMER

Indirect Manufacturer Direct Manufacturer Wholesaler Retailer Consumer

(4 PS) PRICE? WHICH DO YOU THINK WORKS BETTER?

DISCOUNT PRICING • SELLING PRODUCTS AT A REDUCED PRICE • CASH • 2% OFF IF YOU PAY BILL EARLY OR COUPON ON BOX • GET MORE IN TERMS OF QUANTITY • IF THE BAY BUYS 10, 000 DIESEL T-SHIRTS THEY’LL GET THEM CHEAPER • SEASONAL DISCOUNTS • CHRISTMAS CARDS AND OFF-SEASON VACATIONS • PROMOTIONAL DISCOUNTS AND ALLOWANCES • REBATES AND TRADE-IN OLD MERCHANDISE

GUESS THE PRICE !

GUESS THE PRICE ! $17. 93 $3. 49 $17. 89 $19. 99 $18. 83 $1490. 00 $6. 96 $179. 00 $20. 00

IMAGINE YOU WANT TO BUY SOME CHOCOLATE. WHICH OF THESE WILL YOU BUY? MOVE TO THE CORNER OF THE ROOM THAT MATCHES YOUR CHOICE. DISCUSS WHY YOU CHOSE THAT PRODUCT. Broken chocolate bar pieces from the bulk food store. Toblerone bars. Price: $1 for about 2 bars Price: $6. 99 for a large “gift size” bar. Widely available chocolate bars. Price: $1 each GODIVA chocolates – considered by many to be “the best” Price: $20 for a small box of about 12 chocolates

IMAGINE YOU ARE GOING TO BUY A CAR. WHICH OF THESE WILL YOU BUY? MOVE TO THE CORNER OF THE ROOM THAT MATCHES YOUR CHOICE. DISCUSS WHY YOU CHOSE THAT PRODUCT. Lamborghini Gallardo – often mentioned in rap songs. Audi TT – a cool design featured in several movies. Price: $250, 000 Price: $60, 000 A sporty and economical new Toyota Echo Price: $15, 000 1983 used Datsun Price: $600

IMAGINE YOU ARE GOING TO BUY KETCHUP. WHICH OF THESE WILL YOU BUY? MOVE TO THE CORNER OF THE ROOM THAT MATCHES YOUR CHOICE. DISCUSS WHY YOU CHOSE THAT PRODUCT. Annie’s Organic Ketchup Price: $5. 00 Heinz Ketchup Price: $4. 27 Great Value Price: $2. 00 Hunt’s Ketchup Price: $2. 99

WHAT INFLUENCES A PRICE? • • • CONVENIENCE STATUS AND IMAGE (POSITIONING) TRENDS COMPETITION QUALITY COST TO MAKE AND SELL IT HOW MUCH THE TARGET CUSTOMER WILL SPEND FOR IT PROFIT THAT A COMPANY WANTS TO MAKE HOW MUCH A COMPANY WANTS TO SELL HOW QUICKLY THEY WANT/NEED TO SELL OTHERS?

COMPETITIVE PRICING EXAMPLES: VS. Our lowest price guarantee The lowest price is the law

COST-ORIENTED PRICING • COST-ORIENTED PRICING: • PRICE = COST OF MAKING PRODUCT/SERVICE + ALL OTHER EXPENSES (FIXED AND VARIABLE) + DESIRED PROFIT

THE COST OF DOING BUSINESS FIXED COSTS EXPENSES THAT STAY THE SAME REGARDLESS OF HOW MUCH IS PRODUCED OR SOLD. E. G. RENT, PHONE BILL, HEATING, INSURANCE, ETC. VARIABLE COSTS EXPENSES THAT CHANGE DEPENDING ON THE LEVEL OF PRODUCTION OR SALES. E. G. RAW MATERIALS, EMPLOYEE WAGES, SALES COMMISSIONS, SHIPPING COSTS, ETC. OTHER EXAMPLES? Total costs = fixed costs + variable costs

PSYCHOLOGICAL PRICING • REFERS TO TECHNIQUES THAT CREATE AN ILLUSION OR IMPRESSION FOR CUSTOMERS THAT MAKE THEM BUY

PSYCHOLOGICAL PRICING TECHNIQUES • ODD-EVEN PRICING $2. 99 OR $100 • ODD NUMBERS CONVEY BARGAIN! • EVEN NUMBERS CONVEY QUALITY • PRESTIGE PRICING EXPENSIVE $1000+ ROLEX WATCHES • CONVEYS STATUS • YOU’LL LOOK RICH OR COOL

PSYCHOLOGICAL PRICING TECHNIQUES • MULTIPLE UNIT PRICING 4 CHOCOLATE BARS IN A PKG • YOU THINK YOU’RE GETTING A BARGAIN • INCREASES SALES VOLUME • BUNDLE PRICING SHAMPOO AND CONDITIONER BUNDLE • PRICE IS LOWER THAN IF YOU BOUGHT SEPARATELY • GETTING A BARGAIN

PSYCHOLOGICAL PRICING TECHNIQUES • PROMOTIONAL PRICING • LOSS LEADERS – SELL PRODUCTS AT COST OR BELOW TO GET CUSTOMERS IN TO THE STORE • PRICES REDUCED FOR A CERTAIN TIME, IE. AT HOLIDAYS • EVERYDAY LOW PRICES (ELDP) • LOW PRICES EVERY DAY WITH NO INTENTION OF RAISING THEM OR OFFERING MORE DISCOUNTS

(4 PS) PROMOTION • BRANDING IS ESTABLISHING AN IDENTITY FOR A PRODUCT THAT DIFFERENTIATES IT FROM THE COMPETITION. • IT IS MADE UP OF A BRAND NAME, LOGO, SLOGAN, AND TRADEMARK AND CREATES BRAND WHAT IS LOYALTY. BRANDING?

BRAND NAME • A BRAND NAME IS THE LETTERS, WORDS OR NUMBERS THAT CAN BE VERBALIZED • GUESS THE LOGO FONT

TYPES OF BRANDS • A NATIONAL BRAND IS A PRODUCT WHICH IS BRANDED BY A MANUFACTURER'S BRAND IS TYPICALLY SUPPORTED BY HEAVY ADVERTISING. • COCA COLA AND HEINZ KETCHUP WOULD BE EXAMPLES OF THIS.

TYPES OF BRANDS • A PRIVATE BRAND OR “STORE BRAND” LABEL IS A BRAND THAT A RETAILER CREATES TO EXPLOIT THEIR CORPORATE IMAGE • ONLY THAT RETAILER CAN SELL IT • IT ALLOWS THEM TO DIFFERENTIATE THEMSELVES (AND CONTROL PRICE AND QUALITY) EXAMPLES: • LOBLAW’S “PRESIDENT’S CHOICE” • SHOPPER’S DRUG MART’S “LIFE” BRAND • HBC’S “TOGO” BRAND

TYPES OF BRANDS • GENERIC BRANDS OR “NO NAME BRANDS” THE LOWEST COST BECAUSE THE LABELING AND PACKAGING IS CHEAPER • THERE IS NO PROMOTION FOR THIS TYPE OF BRAND.

LOGO • A LOGO IS THE PART OF THE BRAND IN THE FORM OF A SYMBOL THAT IS USUALLY REGISTERED • A BRAND MARK AND TRADEMARK ARE EXAMPLES OF A LOGO

SLOGAN • A SLOGAN IS A CATCHY PHRASE USED TO REMIND THE CONSUMER OF A COMPANY OR BRAND Harvey’s makes a hamburger a beautiful thing”

WHAT IS IT?

TARGET MARKET • ALL THE CHARACTERISTICS OF THE MARKET SEGMENT (CUSTOMERS) THAT YOU ARE SELLING TO.

DEMOGRAPHICS • AGE RANGE • INCOME RANGE • GENDER • MARITAL STATUS • NUMBER OF CHILDREN • OCCUPATION • GEOGRAPHIC LOCATION

PSYCHOGRAPHICS • ATTITUDES • OPINIONS • INTERESTS • LIFESTYLE • NEEDS TO BE FILLED • WHAT OR WHO INFLUENCES THE PURCHASE DECISION • HOW WILL FIND OUT ABOUT YOUR PRODUCT

PROMOTION TECHNIQUES • ADVERTISING: • ex. ads on Web, TV, radio, newspaper, magazines, smart phones, flyers, junk mail. • SALES PROMOTION: • ex. sales coupons, free gifts or samples, games of chance, demonstrations.

PROMOTION TECHNIQUES • PUBLICITY: EX. NEWS REPORT - FREE ADVERTISING. • PRODUCT PACKAGING: EX. THE CONTAINER/WRAPPING IN WHICH THE PRODUCT IS SOLD IN.

PROMOTION TECHNIQUES • PERSONAL SELLING – ONE ON ONE COMMUNICATION TO PERSUADE A CUSTOMER TO BUY • AIDA SELLING FORMULA, THE FOUR STEPS • • ATTRACT ATTENTION HOLD INTEREST AROUSE DESIRE TAKE ACTION TO CLOSE THE SALE