24108 marketing foundations summary notes

8/10/2019 24108 Marketing Foundations Summary Notes

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24108 Marketing Foundations

UTS

Chapter One - INTROUCTION TO M!R"#TIN$

Marketing set of institutions and processes for creating, communicating, delivering and

exchanging products of value for customers, clients, partners and society at large. Firms with a

market orientation perform better than firms without a market orientation. They have better

profits, sales volumes, return on investment and market share. Marketers must learn about the

needs and wants of customers. This is an ongoing process as customer preferences are

continually evolving. The best marketers are able to offer something that is unique or special to

customers e.g. pad.

!n example of marketing in action is !pple "td creating customer delight via market orientation

i.e. a focus on the customer. Moreover, with a clear focus on #ew $roduct !nalysis coupled bymarket research the company is able to achieve this ob%ective. !pple has better profits, sales

volume return on investment and market share. The marketer has adopted marketing thinking via

mutually beneficial exchange with value creation for all parties, both parties expectations being

met and both parties benefit from the transaction.

&thics is a set of moral principles that guide attitudes and behaviour. 'orporate (ocial

)esponsibility is the material fact that businesses have a duty to act in the best interests of the

society that sustains them. They are obliged to act ethically, within the law and fulfil

requirements such as philanthropy, protecting the natural environment, providing products that

benefit society and generating employment and wealth. *antas+s corporate social responsibility-the spirit of !ustralia+ is used as leverage to earn more cash money via support of community

organisations such as 'lean up !ustralia, "and 'are and the $rime Minister+s /isability !wards.

The marketing organisation has not fulfilled its obligations to all stakeholders if it merely acts

within the law. The organisation must act in the best interests of most stakeholders such as

shareholders, employees, customers, partners and government.

Marketing can be used by not for profit organisations such as the (alvation !rmy that aims to

advance the welfare of the less fortunate and needy. This can be via ntegrated Marketing

'ommunications or promotion in online news media to generate donations to help the needy.

! contemporary product that demonstrates how marketers stimulate demand is phone. The

product+s augmentation such as special features that differentiates phone from competing

products e.g. a digital high definition camera which allows users to take pictures when they

want.

!dvertisements that are product focused include 0M1 -the ultimate driving machine+, while

advertisements that are customer focused include #!0 -more give less take.+

.

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The Marketing %ro&ess

The marketing process involves answering two questions. The first question is what customers

we serve market segmentation and targeting. The second question is how we best serve

targeted customers differentiation and positioning.

- Understand the marketplace and custmer needs and !ants

- Des"#n a custmer-dr"$en market"n# strate#%

- &nstruct an "nte#rated market"n# pr#ram that del"$ers super"r $alue

- 'u"ld pr(ta)le relat"nsh"ps and create custmer del"#ht

- &apture $alue *rm custmers t create pr(ts and custmer e+u"t%

Si'p(e Marketing Con&epts- Needs, !ants and demands prducts as )undles * )ene(ts, lk *r )est

$alue *r mne%

Needs th"n#s that are $"tal *r sur$"$al e.#. hus"n#, *d and!ater.

/ants a nn-necessar% des"re e.#. des"#ner clthes and per*ume.

Demands !ants )acked )% )u%"n# p!er

- 0rducts ered t market t sat"s*% need r !ant 2e.#. #ds, e3per"ences,

place, "n*rmat"n4

- 5alue, sat"s*act"n and +ual"t%

5alue custmer6s $erall percept"n * the ut"l"t% * a prduct

)ased n !hat "s rece"$ed and !hat "s #"$en. Ut"l"t% "s the

use*ulness * a prduct.

5 7 8ual"t%9 0r"ce 7 'ene(ts e3pected9 )ene(ts rece"$ed

&ustmer sat"s*act"n e3tent t !h"ch perce"$ed per*rmance

meets e3pectat"ns

8ual"t% h! !ell prducts sat"s(es !ant

- E3chan#e, transact"ns and relat"nsh"ps

E3chan#e the mutuall% )ene(c"al trans*er * prducts * $alue

)et!een )u%er and seller. It "n$l$es:

1. $alue creat"n *r all part"es

;. )th part"es )ene(t *rm the transact"n


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Relat"nsh"p market"n# creat"n#, ma"nta"n"n# and enhanc"n#

strn# $alue-laden relat"nsh"ps !"th custmers and ther

stakehlders.

A market"s a #rup * custmers !"th heter#eneus needs and !ants e.#.

Ge#raph"c markets 2&h"na, Austral"a and the UK4, Dem#raph"c markets 2'a)%

)mers, Gen @ and Gen 4 and 0rduct markets 2!ater )ttle and pa"n k"ller4.

esigning Custo'er-ri)en Marketing Strateg*- Market"n# mana#ement Banal%s"s, plann"n#, "mplementat"n and cntrl *

pr#rams des"#ned t create, cmmun"cate and del"$er $alue t custmers

and *ac"l"tate mana#"n# custmer relat"nsh"ps "n !a%s that ena)le the

r#an"sat"n t meet "ts )=ects and thse * "ts stakehlders

Se(e&ti)e Custo'er to Ser)e

Demand mana#ement understand and mn"tr nature * cnsumer demand?)u"ld pr(ta)le relat"nsh"ps, cst * attract"n# ne! custmer "s ($e t"mes

h"#her than keep"n# e3"st"n# ne

&reat"n# e3c"tement

The Marketing #)o(ution1. Trade 2)arter"n# and e3chan#e * prducts4.

;. 0rduct"n r"entat"n !hat culd )e madeC enr% Frd sa"d that B%u can

ha$e an% car that %u !ant as ln# as "t6s )lack 2)ecause )lack !as the

cheapest car t prduce4


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- Outl"nes !h"ch custmers the cmpan% !"ll ser$e and h! "t !"ll create $alue

- De$elped t del"$er $alue t tar#et custmers

- 'u"lds relat"nsh"ps? cns"sts * market"n# m"3

Managing the Marketing Mi+

0RODU&T #d, ser$"ce r "dea ered t the market *r e3chan#e. 0RI&E the amunt * mne% a )us"ness demands "n e3chan#e *r "ts

prducts.

- 0ROMOTION ad$ert"s"n#, persnal sell"n#, nl"ne market"n#

- 0>A&EMENT channel mana#ement

- 0h%s"cal e$"dence used t measure sat"s*act"n ".e. as ser$"ces are

"ntan#")le

- 0rcess "n h"#h-cntact6 ser$"ces, custmers "n$l$ed "n creat"n# and

en=%"n# e3per"ences

- 0eple man% ser$"ce e3per"ences "n$l$e "nteract"n# !"th peple?

relat"nsh"psCusto'er Re(ationship Manage'ent ,CRM

- O$erall prcess * )u"ld"n# and ma"nta"n"n# pr(ta)le custmer relat"nsh"ps

)% del"$er"n# super"r $alue and sat"s*act"n

- Deals !"th all aspects * ac+u"r"n#, keep"n# and #r!"n# custmers

Re(ationship .ui(ding .(o&ks/ Custo'er a(ue and Satisa&tion- &ustmer perce"$ed $alue e$aluat"n * d"erence )et!een )ene(ts and

csts

- &ustmer sat"s*act"n prduct6s perce"$ed per*rmance and )u%er6s

e3pectat"ns

Capturing a(ue ro' Custo'ers- &reat"n# custmer l%alt% and retent"n del"#hted custmers rema"n l%al

and !"ll tell thers a)ut the"r ps"t"$e e3per"ence !"th )rand? ls"n# a

custmer "s ls"n# mre than a sale

- Gr!"n# share * custmer thru#h $ar"et% and crss-sell"n# e.#.

restaurants !ant share * stmach6 !h"lst )anks !ant share * !allet6

- 'u"ld"n# custmer e+u"t% - the cm)"ned d"scunted custmer l"*et"me $alue

* all a cmpan%6s current and ptent"al custmers

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Chapter To 3 M!R"#TIN$ #NIRONM#NT

The Marketing &nvironment is all the internal and external forces that affect a marketer+s ability

to create communicate and deliver products of value. Marketers must influence their

environment. They use environmental analysis to break the marketing environment into smaller

bits to make it easier to understand. The interna( en)iron'entis the people and processeswithin an organisation that affect a marketer+s ability to create, communicate and deliver

products of value e.g. marketing information system and sales force.

The Micro environment "s the *rces !"th"n an r#an"sat"n6s "ndustr%. It "s nt

d"rectl% cntrlla)le )% the r#an"sat"n. It cns"sts * custmers, cl"ents,

cmpet"trs and partners.

0artners "nclude 2>F/ARS4 >#"st"c (rms 2stra#e and transprt4, (nanc"ers

2)ank"n# and "nsurance4, !hlesalers 2';'4, ad$ert"s"n# a#enc"es, reta"lers 2';&4

and suppl"ers. Marketers must ensure the"r prducts pr$"de the"r tar#et market

!"th #reater $alue than the"r cmpet"trs6 prducts.

The Ma&ro en)iron'ent is the forces outside of an organisation+s industry. t includes $olitical,

&conomic, (ocio cultural, Technological and "egal forces

$olitical forces include lobbying for favourable treatment at the hands of government and

lobbying for favourable regulation.

&conomic forces are how much money individuals and organisations have to spend and how

they choose to spend it. They include prices, income and availability of credit.



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(ocio cultural factors affect people+s attitudes, beliefs, behaviours, preferences, customs and

lifestyles. (ocial 'ultural factors include demographics such as statistics about a population2 age,

gender, ethnicity, educational attainment and marital status. Furthermore, the natural

environment is an example of a social cultural theme that has recently emerged.

Technological forces allow a better way of doing things. Technology changes expectations and

behaviours of customers and clients and have huge effects on how suppliers work.

"egal factors include legislation enacted by elected officials. "aws and regulations fall under the

following categories2 privacy, fair trading, consumer safety, prices, contract terms and

intellectual property.

(ituational !nalysis involves assessing an organisation+s current position in the market place. !

marketing plan communicates how marketers plan to get from the current situation to where

senior management thinks the organisation should be.

Marketing 'etri&sare used to measure the current performance and the outcomes of past

activities. t includes )eturn on nvestment, 'ustomer satisfaction, Market share and 0rand

&quity.

-)eturn on investment 'ost and benefit analysis which takes into account sales volume,

marketing investment cost, share of voice and bottom line profit, share of industry profit.

3'ustomer satisfaction3 churns the percentage of customers lost and number of complaints

received4 resolved.

3Market share is defined as the percentage share of total industry profits including the percentage

improvement in the market share growth4 decline.

30rand equity3 awareness the percentage of the total target market and loyalty repeat purchase

behaviour.

! (15T analysis is used to identify strengths those attributes of the organisation that help to

achieve its ob%ectives, weaknesses those attributes of the organisation that hinder it in trying to

achieve its ob%ectives6 opportunities factors that are helpful to achieve the organisation+s

ob%ectives and threats factors that are harmful to achieving the organisation+s ob%ectives.

(trengths and weaknesses are internal6 opportunities and threats are external..

S5OT !na(*sis o 6antas

Strengths

- highest safety standard

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- employees strong commitment to the *antas 7roup- #amed one of the world+s top airlines in the prestigious (kytrax 1orld !irline !wards.-5eaknesses

- operations deemed as inferior to competitors

- strikes

Opportunities

- transitioning the business from cost centres to profit centres

Threats

- (ecurity concerns- ncreased competition- The federal government+s 1orkplace )elations policy- )ising fuel prices-

Respond to the Marketing #n)iron'entSme cmpan"es $"e! market"n# en$"rnment as uncntrlla)le, thers take n

en$"rnmental mana#ement perspect"$e.

Market"n# mana#ement shuld a"m t )e pract"$e rather than react"$e

!here$er pss")le

Chapter Three 3M!R"#T R#S#!RC7Market )esearch M) is gathering information and knowledge about the market. For example,

a business that makes bird houses involves understanding, creating production and operations,communicating promotion e.g. on 'hannel #ine on T8 on a show such as The 8oice !ustralia

and delivering e.g. a store such as 9mart or Target because older people are not as tech savvy.

The above stated market research process is interlinked and ongoing. Moreover, if a business

creates what it perceives to be a profitable product but if there are hardly any customers, then the

firm needs to do market research to find out why the consumers are not buying. The results of

market research are fed into a Marketing Inor'ation S*ste' ,MIS which holds and

organises all of the organisation+s marketing information. The M( is in house internal

environment.

Market research involves five ma%or components2

- defining the research problem profit or sales related clause- designing the research methodology design e.g. dropping prices by : per cent increases

sales by twenty per cent i.e. actionable results

- collecting data- analysing data and drawing conclusions- presenting the results and making recommendations.

1hat the research is intended to answer is known as the resear&h pro9(e'e.g. ; why is

the sale of sultanas down at the $ymble 1oolworths< = 1hy is !pple+s brand image taking

a hit< !s the research pro%ect proceeds the research problem may need to be redefined. !

market research brief should be prepared to guide the pro%ect. ! market research brief

specifies the research problem, the info required, the time frame and the budget. ! planned



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methodology to answer the research problem is known as the resear&h design. Types of M)

include exploratory, descriptive or causal research. #+p(orator* resear&hgathers more

information about a loosely defined problem e.g. a focus group. es&ripti)e resear&his

used to solve well defined problem by clarifying more about certain phenomena e.g. healthy

product range for M' /onald+s *uick (ervice )estaurants food done fast . Causa(

resear&htests if a variable affects an outcome e.g. effect of coupons on pi>>a sales at $i>>a?ut.

M) draws on two types of data. (econdary data is data already exists. %ri'ar* datagathers

specifically for the current research pro%ect. )esearch methods can be :uantitati)e or

:ua(itati)e resear&h. *uantitative research collects data that can be represented numerically and

analysed statistically. &xperimentation, neuroscience and observation are quantitative research

methods e.g. the survey. *ualitative research obtains rich and detailed info that underlie

observable behaviour. nterviews and focus groups are the most qualitative research methods.

M) tries to find out about the population by studying a small part of it and generalising the

results sample.

$robability sampling ensures every member of a population has a known chance of being

selected in the sample. #on $robability sampling provides no way of knowing the chance of a

member being selected in the sample.

5nce a research pro%ect has been designed, it must be implemented in compliance with the

design via pro%ect management. /ata must be carefully collected and organised so that it can be

efficiently analysed. *uantitative data can be statistically manipulated to identify trends and

patterns in the data. *ualitative data can be reduced to allow statistical analysis but much of the

rich detail can be lost. *ualitative data analysis can lead to further research in the form of

quantitative research. /ata analysis allows conclusions to be drawn and recommendations

formulated. The findings and recommendations of the market research pro%ect should be

presented in a concise and clear manner.

Two types of probability sampling methods are random sampling and stratified sampling. n a

random sample each member of the population has an equal opportunity of being for the sample.

n a stratified sample the population is divided into different groups based on some characteristic

e.g. age and gender and then from each groups a random sample is chosen.

Two types of non probability sampling methods are quota sampling and convenience sampling.

! quota sample divides the population into groups based on a number of characteristics. n a

convenience sample, participants are selected based on convenience e.g. interviewing your

friends and family for a pro%ect.

Unethi&a( 'arket resear&h e+a'p(es

(ugging selling under the guise of market research.

Frugging3 fund raising under the guise of market research.

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Chapter Thirteen 3 Internationa( Marketing7lobalisation is the process via international individuals, organisations and governmentbecome interconnected and similar. 0arriers have diminished facilitating greater

interconnections between different countries and their people. This has resulted in close

interdependence in terms of trade, finance, living standards and security.



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Chapter 4 3 Consu'er .eha)iour ,C.

Factors influencing consumer behaviour (ummary

(ituational factors include physical, social, time, motivational and mood factors.

7roup factors3 cultural sub cultural and social class and social reference groups, family, roles

and status.

ndividual factors3 personal demographics e.g. age, occupation and income6 lifestyle,

personality and self concept and psychological motivation, perception, beliefs and attitudes and

learning.

Case Stud*/ Ne 9usiness )entures 9ui(t on understanding &onsu'er 9eha)iour,5oti&o'

'onsumer behaviour involves getting inside the heads of consumers and understanding their

psychological values. 1otif.com has clear target market i.e. nternational business travellers and

has built a business by selling last minute cheap hotels. f you see a target market not being

served, create a product and make cash money.

'onsumer behaviour is the study of the behaviour of individuals and households who buy

products for personal consumption. t provides an understanding of the reasons behind the

decisions consumers make which is central to creating an effective marketing mix. 'onsumer

behaviour is influenced by situational, group and individual factors. (ituational factors are the

circumstances in which consumers make purchasing decisions. They relate to physical, social,



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time, motivation and mood factors. 7roup factors comprise cultural and social influences.

'ultural influences affect the behaviours of society2 culture, sub culture and social class. 'ulture

is the system of knowledge, values and beliefs by which society defines it. #ational cultures can

be described according to ?ofstede+s cultural dimensions2 power distance, uncertainty

avoidance, individualism, masculinity and long term orientation.

-%oer distan&e3 the degree of inequality among people that is acceptable within a culture.

1estern societies tend to score low on power distance manifesting their relatively egalitarian

cultures, whereas !sian societies score high in power distance, reflecting greater social

inequality. "ess social inequality =@ per cent #ew Aealand, !ustralia BC per cent, Dnited

(tates of !merica E@ per cent6 more social inequality apan :: per cent, (ingapore G: per

cent and ndia GH per cent.

-Un&ertaint* a)oidan&e3 the extent to which people in a culture feel threatened by uncertainty

and relies on mechanisms to reduce it.

3ndividualism is the extent to which people focus on their goals over those of the group.1estern societies are generally individualistic, whereas !sian societies are more collectivist.

3 Masculinity is the extent to which traditional masculine values e.g. status, assertiveness and

success are valued over traditional feminine values solidarity, quality of life.

! sub culture is a group of individuals who share common attitudes, values and behaviours that

distinguish them from the broader culture in which they are immersed. ! social class is a group

of individuals who share common rank within the social hierarchy. (ocial influences are those

that influence an individual to conform to group norms. ! reference group is any group to which

an individual looks for guidance including membership, aspirational and dissociative reference

group. !n opinion leader is any reference group member who provides influential advice to

other group members. nnovators introduce innovations, early adopters including opinion leaders

drive adoption by early ma%ority, late ma%ority and laggards. Family influences are a vital

influence on consumer behaviour with many purchasing decisions made by certain members or

combinations of members of the household. $ersonal and psychological factors influenceconsumer behaviour independently of social circumstances. $ersonal characteristics include

demographic, lifestyle and personality. $sychological characteristics include motivation which is

the internal drive to satisfy unfulfilled needs or achieve goals. !ccording to Maslow+s hierarchy

of needs individuals try to satisfy lower order biogenic needs such as food and sleep ahead of

higher order psychogenic needs such as learning< !nother psychological characteristic is

perception, how an individual manages meaning to external stimuli including marketing

communications. 0eliefs and attitudes are a vital influence on consumer behaviour as they

determine the context in which product evaluations are made. &ffective marketing needs to

appeal to the cognitive, affective and behavioural components of consumer attitudes. The

consumer decision making process comprises of need4want recognition, information search,



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evaluation of options, purchase and post purchase evaluation. 'onsumer decisions involve

different levels of involvement2

3 ?abitual decision making involves low involvement such as buying bread and milk.

3 "imited decision making involve limited information to evaluate options e.g. buying

appliances and clothing.

3 &xtended decision making involve high involvement and is usually for once in a life timepurchase e.g. a car, wedding ring, house or wedding dress.

'ognitive dissonance is second thoughts about the wisdom of a purchase post purchase

evaluation4 regret.

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Ro(es in the .u*ing %ro&ess

Chapter ;- .usiness .u*ing .eha)iourThe business market can be divided into reseller, producer, government and institutional

markets. )eseller markets comprise marketing intermediaries that buy products in order to sell

and lease them to another party for profit. $roducer markets comprise businesses and

professionals that buy products in order to produce other products, or in their daily business

operations. 7ovt markets comprise federal, state and local govt+s that buy products in order toprovide services to citi>ens. nstitutional markets comprise non public and not for profit

organisations that buy and sell products.

There are vital differences in the reflection of business markets and consumer markets. 0usiness

markets involve high value purchases lots of money, high volumes lots of money and regular

repeat purchases. $rice and other conditions of the sale are open to negotiation. There are far

fewer buyers and sellers in business markets. $roducts alternatives are sub%ect to extensive

formal evaluation with decisions made by committees. The relationships between buyers and

sellers tend to be long term and involve extensive after sales support. /emand in business

markets tends to fluctuate much more than demand in consumer markets.

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Many business products are used in the production of another product. This creates a situation of

%oint demand, where demand for one product is related to demand for another product. 0ecause

business products are one of many used in the production of other products, demand for them

tends to be relatively unresponsive to changes in price. This is known as inelastic demand.

/emand tends to be relatively inelastic within an industry but can be elastic in relation to

individual companies. 0usiness purchases take the form of a straight rebuy, modified rebuy ornew task purchase, each of which leads to different levels of engagement in the purchase

decision making process. The group of people who make business purchasing decisions is the

buying centre.

Chapter < 3 M!R"#T S#$M#NT!TION T!R$#TIN$ !N

%OSITIONIN$

(ellers can take three approaches to a market. Mass marketing is the decision to mass produce

and mass distribute product and attract all kinds of buyers. 5ne to one marketing is providing a

customised product to meet individual customer needs. Target marketing is creating a group ofcustomers with homogeneous needs and wants. The target marketing process involves market

segmentation, market targeting, market positioning. Market segmentation involves creating sub

groups within the total market that are homogenous. (egmentation variables used in consumer

markets include geographic, demographic, psychographic and behavioural.

n business markets, organisation si>e, product use and geography are used as segmentation

variables.

Market Seg'ents



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- Se#mentat"n "n$l$es d"$"d"n# a market "nt d"rect #rup * )u%s !h m"#ht

re+u"re separate prducts r mark"n# m"3es? class"*%"n# custmers "nt

#rups !"th d"erent needs, character"st"cs r )eha$"ur

- Ge#raph"c #e#raph"cal un"ts such as nat"ns, re#"ns, ne"#h)urhd

- Dem#raph"c $ar"a)les such as a#e, #ender, l"*e c%cle, "ncme ccupat"n,

rel"#"n

- 0s%ch#raph"c sc"ecnm"c status, l"*est%le, persnal"t% character"st"cs

- 'eha$"ural ccas"ns, )ene(ts su#ht, user status 2nn-user, (rst7t"me,

re#ular4, usa#e rate 2l"#ht, mderate, hea$%4, l%alt% status, )u%er-read"ness,

att"tude

- Business Markets persnal character"st"cs, dem#raph"cs, perat"n#

$ar"a)les, purchas"n# appraches, s"tuat"nal *actrs

#)a(uate Market Seg'ents- S"e and #r!th anal%se data n current and pr=ected sales #r!th rates?

lar#e cmpan"es ma% !ant lar#e current sales and h"#h #r!th rates,!hereas smaller cmpan"es ma% (nd "t t cmpet"t"$e

- Structural attract"$eness cmpet"trs, p!er * )u%ers, su)st"tute prducts,

p!er * suppl"ers

- &mpan% )=ect"$es and resurces e$aluate !hether se#ment (ts !"th

cmpan%6s #als and )=ects? !hether the cmpan% has resurces t # "nt

the se#ment

Targeting Strategies- Und"erent"ated market"n# ne hm#enus market? ne market"n# m"3

- D"erent"ated market"n# se$eral markets? se$eral market"n# m"3es2d"erent prduct er"n#s4

- &ncentrated market"n# ne tar#et market thu#h market "s

heter#eneus? ne market"n# m"3

ierentiation and %ositioning- 0rduct ps"t"n !a% the prduct "s de(ned )% cnsumers n "mprtant

attr")utes

- 0s"t"n"n# strate#"es prduct attr")utes, )ene(ts, usa#e ccas"ns,

a#a"nst9a!a% *rm cmpet"trs, prduct classes

Choosing and I'p(e'enting %ositioning Strateg*- Ident"*% $alue d"erences perceptual mapp"n#, anal%se ps"t"n * )rand "n

m"nd * cnsumers, rat"n# )rands a#a"nst each ther

- Ident"*% cmpet"t"$e ad$anta#e understand needs and )u%"n# prcesses?

del"$er mre $alue

Diferentiation

- 0rduct - per*rmance, st%le, des"#n, dura)"l"t%, rel"a)"l"t%, cns"stenc%

- Ser$"ces - del"$er%, "nstallat"n, repa"r, custmer ser$"ce, cnsult"n# ser$"ce

- 0ersnnel - h"r"n# and tra"n"n# )etter empl%ees than cmpet"trs

- Ima#e - )rand, s%m)ls and l#s, spnsrsh"p



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Se(e&ting O)era(( %ositioning Strateg* ,%ositioning State'ent

.rand=s a(ue %roposition 6ua(it* o

%rodu&t>Ser)i&e

Cost

More for more Most upscale ?igher price

More for the same attack competitor+spositioning

'omparable quality6more product4service

"ower price

(ame for less powerfully value

proposition

(ame quality "ower price

"ess for much less "ess quality "ower price

More for less winning value proposition6

hard to maintain

More quality6 more

product4service

"ower price

Co''uni&ating and e(i)ering the Chosen %roposition- Market"n# m"3 erts must supprt the ps"t"n"n# strate#%

- 0s"t"n must )e mn"trs and adapted $er t"me t match chan#es "n

cnsumer needs and cmpet"trs6 strate#"es

Chapter ? 3 %ROUCTS

! product is a good, service or idea offered to the market for exchange. t can be tangible,

intangible or both. Marketers analyse products using the tota( produ&t &on&ept2 core, expected,

augmented and potential products.

Tota( %rodu&t Con&ept-&re 0rduct )as"c )ene(t )u#ht? e#. *r a car "t "s transprtat"n *rm A t

'. Fr cee "t "s cae"ne h"t4. Fr m)"le phnes "t "s cmmun"cat"n.

1J| M A R K E T I N G F O U N D A T I O N S


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-E3pected 0rduct prduct6s character"st"cs 2+ual"t% le$el, *eatures, st%l"n#,

)rand "ma#e and packa#"n#4.

-Au#mented 0rduct )undle * )ene(ts that d"erent"ates the prduct 2e.#.

!arrant"es, del"$er%4

e.#. *r a !ash"n# mach"ne "t culd )e !arrant"es, a dela% *unct"n and del"$er%.

Fr a m)"le phne "t culd )e a camera.

-0tent"al 0rduct- *eatures that are )e"n# de$elped and prtt%ped. e.#. ret"na

rec#n"t"n secur"t% *r a cred"t card.

A prduct can )etangibleand intangible#"$e e3amples * each.

A prduct that "s tan#")le and can )e del"$ered t the cnsumer "s a #d "t

"ncludes cmmd"t"es l"ke cee, tea, su#ar, salt and m"nerals.

A prduct that "s "ntan#")le and des nt "n$l$e !nersh"p "s a ser$"ce l"ke aha"r cut, "nsurance and a"r plane tra$el.

$roducts can be divided into &onsu'er produ&tspurchased by individuals and households and

9usiness produ&ts purchased by an organisation to be used in its operations or in the

production of other products.

The concept of produ&t (ie &*&(esays that a product passes via five stages2 new product

development, introduction, growth, maturity and decline.

Ne %rodu&t de)e(op'enthas eight stages2 idea generation, screening eliminating unviableideas, concept evaluation, marketing strategy, business analysis how the new product will

affect costs, sales and profits, product development, test marketing and commercialisation.

The product adoption process describes the stages via which a potential customer passes, first

becoming aware of the new product, then deciding to adopt4 buy the product. n this process the

consumer who accepts a new product passes via five stages2 awareness, interest, evaluation, trial

and adoption.

$roduct differentiation is the creation of products and attributes that distinguish one product

from one and another. Most of the differentiation occurs in the augmented product layer of the

total product concept. The design, brand image. (tyle, quality and features are the key productattributes that can be used to differentiate products from competitors products.

0rand is the collection of symbols e.g. name, logo and slogan intended to create a

differentiated image in the customer+s mind. 0rands play a ma%or role in the consumer+s choice

of a product, namely high involvement products, as well a highly popular brand with a good

reputation will more likely be chosen rather than a cheaper and unknown brand.

Consu'er %rodu&t C(assii&ations and Market Considerations

einition Custo'er

.u*ing

%ri&e istri9ution %ro'otion



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.eha)iour

Con)enien&e

%rodu&ts

,Stap(e i'pu(se

and e'ergen&*

produ&ts&.g. toothpaste,

household items,

breakfast cereals

0ought

frequently, with

little engagement

in the purchasing

decision makingprocess.

Frequent

purchase, little

planning or

comparison, low

involvement

"ow

price

1idespread

distribution,

convenient

locations

Mass

promotion by

producer

Shopping

%rodu&ts

&.g. ma%or

appliances,

electronics,

clothes

Moderate to high

engagement based

on quality, price

and features.

"ess frequent,

much planning

and shopping

effort,

comparison of

brands on price,

quality and style

?ighe

r price

(elective

distribution

in fewer

outlets

!dvertising

and personal

selling by

both

producer and

resellers

Spe&ia(t*

%rodu&ts

&.g. luxury goods

Dnique

characteristics,

unique brand

identification,

willing to make

special purchase

effort

(trong brand

preference and

loyalty, little

comparison of

brands, low price

sensitivity

?igh

price

&xclusive

distribution

in one or few

outlets per

market area

'arefully

targeted

promotion by

both

producer and

resellers

Unsought

%rodu&ts

&.g. life

insurance, blooddonation, $est

control and

'rimsafe

9now about

products or

doesn+t normally

think of buying

"ittle product

awareness, little

product

knowledge, littleor even negative

interest

8aries 8aries easy

access

helpful

onlinedistribution

advantageous

!ggressive

advertising

and personal

selling

%rodu&t Re(ationships-0rduct "tem- a part"cular $ers"n * a prduct

-0rduct l"ne set * prduct "tems related )% character"st"cs such as end use,

tar#et market, technl#"es and ra! mater"als

-0rduct m"3 set * all prducts that an r#an"sat"n makes a$a"la)le t

custmers.

%a&kaging- Des"#n"n# and prduc"n# the cnta"ner r !rapper *r prduct

- Alter"n# packa#"n#, secndar%-use packa#"n#, cate#r% cns"stent packa#"n#,

"nn$at"$e packa#"n#, mult"ple packa#"n#, handl"n#-"mpr$ed packa#"n#

@a9e((ing- 0art * packa#"n#, cns"st * pr"nted "n*rmat"n appear"n# n r !"th the

packa#e

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.randing- Add $alue t prduct, p!er*ul )rands ha$e cnsumer *ranch"se cmmand

strn# cnsumer l%alt%

- 'rand e+u"t% $alue * )rand )ased n e3tent t !h"ch "t has h"#h )rand

l%alt%, name a!areness, perce"$ed +ual"t%, strn# )rand assc"at"ns and

ther assets such as patents, trademarks and channel relat"nsh"ps- 'rand mean"n#s attr")utes 2)rand )r"n#s t m"nd attr")utes such as

prest"#e4? )ene(ts 2custmers )% *unct"nal and emt"nal )ene(ts4? $alues

2)rand sa%s smeth"n# a)ut )u%ers6 $alue4? persnal"t% 2)rand pr=ects

persnal"t%4

- 'rand spnsr dec"s"n manu*acturers6 )rand, pr"$ate )rand, l"cens"n#, c-

)rand"n#

- 'rand strate#% l"ne e3tens"n, )rand e3tens"n, mult")rands, ne! )rands

- 'rand reps"t"n"n# need t chan#e prduct and "ma#e, chan#e att"tudes

and percept"ns t!ards )rands, need hu#e prmt"ns

@#CTUR# ?. 3 N#5 %ROUCTS

5hat is a Ne %rodu&t

- Ne! t the !rld 2e.#. "n$ent"ns4


5verview of

brandingdecisions


20/120

- Ne! cate#r% entr% 2".e. tak"n# cmpan% t ne! cate#r%4

- Add"t"ns t prduct l"ne

- 0rduct "mpr$ements

- Reps"t"n"n# 2e.#. retar#eted *r ne! use r appl"cat"n e.#. Dettl hand

!ash H clean"n# a#ent4

- 5ar"at"ns * the a)$e 2e.#. ne! t a cuntr%, ne! t channel, packa#"n#

"mpr$ement4

Ne %rodu&t Su&&ess and Fai(ure- Ne! custmer packa#ed #ds ra"l LP * t"me,


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- 0rduct "ma#e !a% cnsumers perce"$e an actual r ptent"al prduct

- &ncept test"n# prcess * test"n# prduct cncepts !"th a #rup * tar#et

custmers

4 Marketing Strateg* e)e(op'ents- Des"#n"n# * "n"t"al market"n# strate#% *r ne! prduct

1. Descr")e tar#et market, planned prduct ps"t"n"n#, sales, marketshare, pr(t #als

;. Outl"ne prduct6s planned pr"ce, d"str")ut"n and market"n# )ud#et


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The %rodu&t @ie C*&(e ,%@C

Marketing @aThe law imposes a number of duties on the marketer. &ach element of the marketing mix is

controlled in some way by the law, be it common law or by statute. They include2

- (57 legislation- 'onsumer protection legislation- 'onsumer credit legislation- /ebt collection

- )estrictive trade practices legislation- $rincipal and agency law- $ law- "aw of contract- "aw of torts

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Chapter ourteen- Marketing %(anningStrategi& %(anning process of developing and maintaining a strategic fit between

organisations goals and capabilities in light of changing marketing opportunities

Marketing %(an )s .usiness %(an

-'us"ness plan "ncrprates plans * all )us"ness *unct"ns-Market"n# plan *cuses n:

a. &ustmer ac+u"s"t"n, retent"n and re+u"red resurces

). Resurces re+u"red t "mplement spec"(c market"n# *unct"ns

c. &$ers ne %ear 2markets keep chan#"n#4

d. 5ar"es "n len#th

e. Shrtcm"n#s ma% "nclude lack * real"sm, "nsuc"ent market,

shrt-run *cus

Contents o Marketing %(an

1. E3ecut"$e Summar% )r"e* summar%, a"med at sen"r mana#ement, nln#er than a pa#e

;. &urrent market"n# s"tuat"n )ack#rund data n tar#et market, prduct,

cmpet"t"n, d"str")ut"n and macr-en$"rnment

ss Statement )ud#et !"th re$enue sh!"n# sales,

e3penses sh!"n# cst * prduct"n, d"str")ut"n and market"n#

L. &ntrls mn"tr"n# plans pr#ress? cnt"n#enc% plan

;


24/120

%RICIN$ CONSI#R!TIONS B !%%RO!C7#S

$rice is the amount of money charged for a product or service. s the only element in themarketing mix that produces revenue, all other elements represent cost. t is used as a

competitive weapon.

I'portan&e o %ri&ing/

$ricing is getting more and more important due to better informed customers e.g.

through new media and mistakes in companies+ communication

$ricing has a huge impact on competitors2

'ompetitors can expect effects from a price change that are twice as high as those from a

change in another marketing variable

Interna( Fa&tors !e&ting %ri&ing/

Marketing O9e&ti)es/

survival

current profit maximi>ation short run

market3share leadership long run

product3quality leadership high prices

'ompanies often have more than one ob%ective, which may lead to a conflict of interestsI

Co'pan* Resour&es/

si>e of the company

resources.

%ri&ing i(( 9e a un&tion o &osts/

fixed cost

variable cost

total cost

experience cost curves, costs decline over time as a result of accumulated production

experience

Marketing Mi+ Strateg*/

%rodu&t/

how important is the product#"st"cal eect"$eness: smthness "n del"$er%- Ser$"ce del"$er% ma% *ll! standard"sed prcedure that cmpr"ses a num)er

* act"$"t"es

- Act"$"t"es ma% ccur rontstage2"n $"e! * custmer4 r backstage2nt

seen4 e"g" frontstage at T&G is the process of the wash! haircut and blow(dry-

backstage is washing the t!els

The ?%s 3 %h*si&a( #)iden&e- Sett"n# !here ser$"ce "s del"$ered? tan#")le cmpnents

- Ser$"cescapes ph%s"cal en$"rnment !here the custmer and pr$"der

"nteract 2the salon4- An% tan#")le cmpnents that *ac"l"tate per*rmance r cmmun"cat"n *

the ser$"ce 2the shampoos used! the scissors and other tools4

- The "ntan#")"l"t% * ser$"ce er"n#s makes tan#")le cues an essent"al part *

the ser$"ce prcess

The ?%s 3 %eop(e- All humans !h pla% a rle "n ser$"ce del"$er% !h "nuence the percept"ns

* custmers

- Ser$"ce del"$er% empl%ees 2*rnt-l"ne sta4 the hairdressers themseles

- General sta * the ser$"ce cmpan% 2the receptionist when making a

booking4

- The custmer

- Other custmers present "n the ser$uct"n 2ser$"ce-prduct"n4 and del"$er%

prcess


34/120

Ser)i&e as a %ro&ess/ I'p(i&ations- 0eple prcess"n# custmers must ph%s"call% enter the ser$"ce *actr%6 and

cperate !"th ser$"ce perat"n? mana#ers must th"nk a)ut prcess and

utput *rm custmers6 perspect"$e

- 0ssess"n prcess"n# custmers less ph%s"call% "n$l$ed? prduct"n and

cnsumpt"n are separa)le

- Mental st"mulus prcess"n# eth"cal standards re+u"red as custmers can )e

man"pulated? ph%s"cal presence nt re+u"red? cre cntent * ser$"ce "s

"n*rmat"n )ased? can )e "n$entr"ed

- In*rmat"n prcess"n# mst "ntan#")le ser$"ce utput? trans*rmed "nt

endur"n# *rms * ser$"ce utput? l"nk )et!een "n*rmat"n prcess"n# andmental st"mulus prcess"n# can )e )lurred

Using ?%s or Ser)i&es Strateg*- O$erall strate#"c assessment h! eect"$e "s a (rm6s ser$"ces market"n#

m"3? "s the m"3 !ell al"#ned !"th $erall $"s"n and strate#%? !hat are

stren#ths9!eaknesses "n terms * 0sC

- Spec"(c ser$"ce "mplementat"n !h "s custmer? !hat "s the ser$"ce? h!

eect"$el% des the ser$"ces market"n# m"3 *r a ser$"ce cmmun"cate "ts

)ene(ts and +ual"t%? !hat chan#es neededC

Ser)i&es Marketing/ "e* Cha((enges- ! can ser$"ce +ual"t% )e de(ned and "mpr$ed

- Des"#n"n# and test"n# ne! ser$"ces t take "nt accunt "ntan#")"l"t%

- &mmun"cat"n and cns"stenc% * "ma#e

- Deal"n# !"th demand uctuat"n

- Strate#"c and tact"cal dec"s"n mak"n# !hen "nter-*unct"nal crd"nat"n "s

re+u"red

- 'alance )et!een custm"sat"n and standard"sat"n

- Susta"na)le cmpet"t"$e ad$anta#e

- &mmun"cat"n# the $alue and +ual"t% * smeth"n# "ntan#")le t custmers

- Del"$er"n# ser$"ce +ual"t% !hen empl%ees and custmers cntr")ute t "t

themsel$es


35/120

@#CTUR# 8 - %@!C#M#NT

Marketing @ogisti&s Netork- Trad"t"nall% ph%s"cal d"str")ut"n? tda% "ncludes l#"st"cs, market"n#

l#"st"cs, "nte#rated l#"st"cs mana#ement, suppl%-cha"n mana#ement and

mater"als mana#ement and ph%s"cal d"str")ut"n

- Includes prcur"n# "nputs 2e.#. ra! mater"als, e+u"pment, cap"tal4 and

cn$ers"n t (n"shed prducts and cn$e%"n# them t end users

- Net!rk pla%ers suppl"ers, purchas"n# a#ents, manu*acturer, marketers,

transprt a#enc"es, end-cnsumer

- Other 06s

0rduct $ar"at"n 2clur, s"e, *eatures4 ma% "mpse )urden n

d"str")ut"n *ac"l"t"es


36/120

0rmt"n campa"#ns must reect l#"st"cs del"$er%

0r"c"n# surce * d"erent"al ad$anta#e )ased n super"r

l#"st"cal ser$"ce, need t cmpare the pr"ce end-user !"ll pa% *r

each channel

Marketing Channe(s- D"str")ut"n channels are the path!a%s that cmpan"es use t sell the"r

prducts t end-users

- Net!rk * "nterdependent r#an"sat"ns mak"n# prduct9ser$"ce a$a"la)le

*r use9cnsumpt"n

- Intermed"ar"es are r#an"sat"ns l"nk"n# prducers t ther "ntermed"ar"es r

t the custmer thru#h cntractual arran#ements t purchase and resale

prducts

5h* Marketing Inter'ediaries are Used

- &st manu*acturer "s pa"d "mmed"atel% re#ardless * !hether prducts aree$entuall% sld

- Increased c$era#e

- &nsumer cn$en"ence cnsumers # t

nce place

- &ustm"sed appraches t custmer needs

- Greater ec"enc% and eect"$eness

- Impr$ed market"n# ert

- Reduct"n * num)er * channel

transact"ns

Marketing Channe(s adding a(ue- In*rmat"n #ather"n# and d"str")ut"n# market"n# research and "ntell"#ence

- 0rmt"n de$elp"n# and spread"n# cmmun"cat"ns a)ut an er

- &ntact (nd"n# and cmmun"cat"n# !"th prspect"$e )u%ers

- Match"n# shap"n# and (tt"n# the er t the )u%er6s needs

- Ne#t"at"n reach an a#reement n pr"ce and ther terms * the er s

that !nersh"p r pssess"n can )e trans*erred

- 0h%s"cal d"str")ut"n transprt"n# and str"n# #ds

- F"nanc"n# ac+u"r"n# and us"n# *unds t c$er the cst * the channel !rk

- R"sk tak"n# assum"n# the r"sks * carr%"n# ut the channel !rk

Channe( Organisation 3 erti&a( Marketing Netorks ,NM- In*rmat"n #ather"n# and d"str")ut"n# market"n# research and "ntell"#ence

- &ns"sts * suppl"ers, !hlesalers, reta"lers act"n# as un"(ed net!rk

- Net!rk can )e nm"nated )% e"ther the suppl"er, !hlesaler r reta"ler

-

-


37/120

-

-

-

-

-

-

-

-

-

- T%pes * 5MN "nclude crprate, cntractual r adm"n"stered

Choosing a istri9ution Mode(- Ne! prducts needs t )e "ntrduced )% demnstrat"n and e3planat"n,

retailers not appropriate- ne! tls and e+u"pment need d"rect market"n#

thru#h commission agents 2''4

- Small custmer )ases read"l% access")le custmers ha$e wholesalers r

distributorstar#et custmers *r d"rect sales thru#h commission agents-

direct salescan help ma3"m"se pr(ts and create #d custmer

relat"nsh"ps


38/120

- 0ersnal"sed ser$"ce local dealer networkr reseller programt pr$"de

ser$"ce

- 'u%"n# nl"ne e(commerce websitet sell d"rect? sell t online retailer or

distributor

- O!n spec"al"sed sales team lk *r sales prspects and clse deals d"rectl%

!"th custmers

Retai(ing- Reta"l"n# act"$"t"es "n$l$ed "n sell"n# #ds r ser$"ces d"rectl% t (nal

cnsumers *r the"r persnal, nn-)us"ness use

- Reta"lers )us"nesses !hse sales cme pr"mar"l% *rm reta"l"n#? class"(ed

thru#h:

Retai(er Marketing e&isions ,Strateg* 3 Target Market and %ositioning- 0rduct 2and ser$"ce assrtment4 dec"de n prduct $ar"a)les * prduct

assrtment, ser$"ces m"3 and stre atmsphere- 0r"ce pr"ce pl"c% must (t tar#et market and ps"t"n"n#, prduct and

ser$"ce assrtment and cmpet"t"n? e"ther h"#h mark-ups n l!er $lume

r l! mark-ups n h"#her $lumes

- 0rmt"n use an% r all * prmt"n tls 2ad$ert"s"n#, persnal sell"n#,

sales prmt"n, pu)l"c relat"ns and d"rect market"n#4? !e)s"tes er"n#

"n*rmat"n and sell"n# d"rect

- 0lacement &'D, shpp"n# centres 2re#"nal and str"p4, clusters * reta"lers

"n cmmerc"al )u"ld"n#s r near htels, d "t %ursel*6 reta"l parks,

enterta"nment centres, arcades and cn$ers"n * h"str"cal )u"ld"n#s


39/120

5ho(esa(ing-All act"$"t"es "n$l$ed "n sell"n# #ds and ser$"ces t thse )u%"n# *r resale

r )us"ness use

-/hlesalers per*rm ne r mre *unct"ns: sell"n# and prmt"n#, )u%"n#

and assrtment )u"ld"n#, )ulk )reak"n#, !arehus"n#, transprtat"n,

(nanc"n#, r"sk )ear"n#, market "n*rmat"n, mana#ement ser$"ces and ad$"ce


40/120

T*pes o 5ho(esa(ers-Merchant !hlesalers "ndependentl% !ned )us"ness that take t"tle t the

merchand"se the% handle? lar#est s"n#le #rup * !hlesalers

-Full ser$"ce !hlesalers pr$"de *ull set * ser$"ces 2e.#. carr%"n# stck,us"n# sales-*rce, er"n# cred"t, mak"n# del"$er"es and pr$"d"n#

mana#ement ass"stance4

->"m"ted ser$"ce !hlesalers cash and carr% !hlesalers, trust !hlesalers,

drp sh"ppers rack =))ers, prducers6 cperat"$es, ma"l rder !hlesalers

-'rkers )r"n#s )u%ers and seller t#ether and ass"sts ne#t"at"n? pa"d )%

part"es h"r"n# them? d nt carr% "n$entr% r #et "n$l$ed "n (nanc"n# nr

assume r"sk

-A#ents represent )u%ers r sellers n a mre permanent )as"s? there are214 manu*acturer6s a#ent 2;4 sell"n# a#ent 2


41/120

@#CTUR# 10 3 INT#$R!T# M!R"#TIN$ COMMUNIC!TION/

!#RTISIN$

1hat is promotion< ?ow do marketing communication activities assist the other elements of the

marketing mix in an organisationKs marketing strategye, features, styles

may impose a burden on distribution facilities

%ro'otion/

campaigns must reflect logistics delivery

%ri&ing/

a source of differential advantage based on superior logistical service

if you use multiple channels, compare the price that the end3user will pay6 if a customer

can buy from one channel at a lower price than another, your partners will rightfully have

concerns.

Marketing Channe(s/

! set of interdependent organisations involved in the process of making a product or service

available to users.

/istribution channels are the pathways that companies use to sell their products to end3

users.

#etwork of interdependent organisations or intermediaries

making product or service available for use or consumption

ntermediaries are organisations linking producers to other intermediaries or to the

customer through contractual arrangements to purchase and resale products i.e. transport

companies, /an Murphy+s

7o Marketing Channe(s !dd a(ue/

nformationLgathering and distributing marketing research and intelligence.

$romotionLdeveloping and spreading communications about an offer.

'ontactLfinding and communicating with prospective buyers.

MatchingLshaping and fitting the offer to the buyer+s needs, including such activities as

manufacturing, grading, assembling and packaging.


44/120

#egotiationLreaching an agreement on price and other terms of the offer so that

ownership or possession can be transferred.

$hysical distributionLtransporting and storing goods.

FinancingLacquiring and using funds to cover the costs of the channel work.

)isk takingLassuming the risks of carrying out the channel work.

@e)e(s and Channe( Con(i&t/

'hannel level is a layer of intermediaries who perform some work in bringing the product and its

ownership closer to the final buyer.

'hannel ;, manufacturer 'onsumer no intermediary levels

'hannel =, manufacturer )etailer 'onsumer

'hannel B, manufacturer 1holesaler )etailer 'onsumer

'hannel conflict is the disagreement among marketing channel level members on goals and

roles, on who should do what and for what rewards.

Channe( Organisation/

erti&a( Marketing Netorks ,MNare a distribution channel structure in which producers,

wholesalers and retailers act as a unified network, one channel member owns the others.

8ertical Marketing #etworks 8M# consists of2

suppliers

wholesalers

retailers acting as a unified network

The vertical marketing network can be dominated by the suppliers, wholesaler or retailer.

T*pes o MN/

corporate, combines successive stages of production and distribution under single

ownership

contractual, independent firms at different levels %oin together to obtain economies of

scale

wholesaler3sponsored voluntary chain, wholesalers organise voluntary chains of

independent retailers to help them compete with large corporate chain organisations

retailer cooperatives, retailers organise a new, %ointly owned wholesale business

franchise organisation, a channel member called a franchisor links several stages inthe production3distribution process

administered, coordinates successive stages of production and distribution, not through

common ownership but through the power of one of the parties

Retai(ing

!ll activities involved in selling goods or services directly to final consumers for their personal,

no3business use.

Retai(ing C(assii&ation/

)etail stores can be classified four ways2

!mount of (ervice2



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)etailers must decide on three main product variables2

product assortment

services mix

store atmosphere

%ri&e e&ision

a retailer+s price policy must fit its target market and positioning, product and service

assortment, and competition.

most retailers seek either high markups on lower volumes or low mark3ups on higher

volumes.

%ro'otion e&ision

use any or all of the promotion tools advertising, personal selling, sales promotion, public

relations and direct marketing to reach consumers.

most retailers have also set up websites offering customer information and other featuresand often sell merchandise directly.

%(a&e'ent e&ision

'entral 0usiness /istrict '0/

(hopping 'entres

regional shopping centres.

strip shopping centres.

5ther types of store clusters include2

clusters of retailers in commercial buildings or surrounding ma%or hotels.

-/o it yourself+ retails parks.entertainment centres.

arcades and the conversion of historical buildings.

5ho(esa(ing

1holesaling includes all activities involved in selling goods and services to those buying for

resale or business use. 1holesalers are performing one or more of the following functions2

selling and promoting

buying and assortment building

bulk breaking

warehousing transportation

financing

risk bearing

market information

management services and advice

T*pes o 5ho(esa(ers/

Merchant 1holesalers

independently owned businesses that take title to the merchandise they handle. The

largest single group of wholesalers.



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@e&ture 10/Integrated Marketing Co''uni&ation ,IMC2

The concept under which a company carefully integrates and coordinates its many

communications channels to deliver a clear, consistent and compelling message about its

products

'o3ordination of the organisation+s promotional efforts

Dses ma%or communication elements such as2

advertising,

sales promotion, public relations,

direct and online marketing

personal selling.

Meets ob%ectives such as to inform, persuade, and remind consumers

!d)ertising/

!ny paid form of non3personal presentation and promotion of ideas, goods or services by an

identified sponsor.

0enefits2

cost efficient in reaching a large audience unlike personal selling

lets the advertiser repeat the message several times and in several different media unlike

personal selling

ability to control message unlike publicity

able to create favourable images unlike some sales promotions like price discounts, buy

one get one free

"imitations2

difficult to determine or measure its effectiveness in terms of sales, for example unlike

sales promotion eg coupons

delayed feedback from customers in terms of intention to buy, for example unlike

personal selling



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credibility problemsunlike publicity

clutter in many media billboards, T8 etc

Sa(es %ro'otion/

(hort3term incentives activity or material to encourage purchase of a good or service.

!ttempts to alter the price3value relationship of a product in the prospect+s mind, usually

for a limited time.

0enefits2

a way to appeal to price3sensitive consumers

can generate extra interest in ads

easier to measure effects of sales promotion such as coupons, price discounts on sales,

for example

"imitations2

often has short3term impact only

often does not contribute to brand image unlike advertising

can lead to promotional wars among competitors

%u9(i& Re(ations/

! broad set of communication tools or methods used to create and maintain favourable

relationships between an organisation and its stakeholders employees, customers, shareholders,

government officials, society at large etc. &xample of $) Tools2 $ublicity (ponsorship, even

advertisingI

%u9(i&it* a too( o %u9(i& Re(ations/

t is non3personal communication in a news story form about an organisation4product transmittedthrough a medium for freeN.

0enefits2

$ublicity via news items editorial in print4blogs4T8 broadcasts etc is more credible than

advertising in mass media.

"ow cost way to communicate

"imitations2

"ack of control unlike advertising

'an be negative

e&isions in e)e(oping IMC/

Identi*ing the Target !udien&e

!udience may be2

potential buyers or current users,

those who make the buying decision,

those who influence it

Identi* Response Sought/

.u*er Readiness States/

!areness "no(edge @iking %reeren&e Con)i&tion %ur&hase



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Se(e&ting a Message/

deally the message should2

7et !ttention

?old Interest

!rouse esire

5btain !ction

! framework known as the !/! model

Message Content/

)ational !ppeals

relate to the audience+s self interest

show how the product will produce the benefits

&motional !ppeals

stir up positive or negative emotions that can motivate purchase

Moral !ppeals directed to the audience+s sense of what is right and proper

Message (tructure3there are three message structure issues2

whether to draw a conclusion or leave it to the audienceines



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"ack of demographic eg gender or lifestyle selectivity eg gardening enthusiasts

unlike maga>ines

(mall pass3along audience unlike maga>ines

(hort life span unlike maga>ines

Te(e)ision ,)ersus Radio

!dvantages2

7reater creativity and impact than radio

7reater attention than radio

/isadvantages2

"ess demographic4geographic selectivity than radioOfew local T8 stations than local

radio stations

?igher cost than radio

@e&ture 11/%u9(i& Re(ations/Ma%or mass3communication tool.

!ims at building good relations with the company+s various publics using different tools2

news

speeches

special events

written materials

audiovisual materials

corporate identity materials

community service activities

Sa(es %ro'otion

nfluencing customer perceptionand behaviour to2

build market share,

increase sales and

reinforce brand image

Dsed to2

!ttract new triers #on3users, loyal users of another brand, and brand switchers

)eward and retain brand3loyal customers

;| M A R K E T I N G F O U N D A T I O N S


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)educe time between purchases

Turn light users into medium or heavy users

)egain past purchasers

&valuation of performance

Sa(es %ro'otion Too(s

'ontests and games of skill and chance, give consumers the chance to win something of

value by luck

(amples, free or discounted goods provided at store level through the media

)edeemable coupons, a coupon carried on pack or in other media that when forwarded to

a marketer will be redeemed for a product or service

'ash3back offers, a cash discount

'ents3off deals or $rice $acks, a reduced price that is marked by the producer directly on

the label or package

$remiums, goods offered free of charge or at reduced price as an incentive to buy a

product

!dvertising (pecialties, a article imprinted with an advertisers name, given as a gift to

consumers

$atronage )ewards, a cash, merchandise or service reward offered to consumers who

make continual use of a companyPs product or service, e.g. frequent flyer plans

$oint3of3$urchase, an offer ranging from a theme promotion in store to a specially

arranged selling area

Ro(e o %ersona( Se((ing

$ersonal selling involves two3way, personal communication between salespeople and individual

customers

face3to3face

by telephone

through video conferences

or by other means

(ales people are concerned with producing sales but should also be concerned with

customer satisfaction and profit

Maor Steps in #e&ti)e Se((ing/

Se((ing %ro&ess/

The steps that the salesperson follows when selling. These are2

$rospecting, salesperson identifies qualified potential customers

$reapproach, salesperson learns as much as possible about a prospective customer before

making a call

$resentation, salesperson tells the product story to the buyer, showing how the product

will save them money


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?andling ob%ections, salesperson seeks out, clarifies and overcomes customers ob%ections

to buying

'losing, salesperson asks the customer to an order

Follow3up, salesperson follows up after the sale to ensure customer satisfaction and

repeat business

%ersona( Se((ing and Re(ationship Marketing/

)elationship marketing2

process of creating, maintaining and enhancing strong, value3laden relationships with

customers and other stakeholders

stresses profitable long3term relationships with customers by creating superior customer

value and satisfaction

1inning and keeping accounts requires more than making good products and closing lots

of sales

ire&t and igita( Marketing/This is an interactive system of marketing which uses one or more advertising media to affect a

measurable response or transaction to any location.

nternet is a public network.

ntranet2,secure websites accessed by company employees only.

&xtranet, websites accessed by both employees and known customers.

'ustomer relationship management ')M2

one3to3one marketing 5neto5ne

direct marketing or direct3order marketing &3marketing

interactive marketing

For's o On(ine and ire&t Marketing/

(ales $romotion

/irect print and reproduction, involves mail outs of letter, product lists and catalogues to

a list of known database of customers

/irect3response, T8 and )adio, use of mass promotion media combined with a directresponse offer, usually involving telemarketing

Telemarketing, use of telephone operators to attract new customers or contact existing

customers

ntegrated database marketing,

Telesales, routine order taking by telephone operators

&lectronic shopping, purchasing via an electronic bulletin board or Telstra+s /iscovery,

or via interactive cable television

/irect selling, selling directly to consumers or businesses rather than using a reseller,

such as a retailer or agent



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&lectronic dispensing Q kiosks, a machine that dispenses products or services usually by

inserting cash or a transaction

ire&t and igita( ata9ase Use/

ire&t and on(ine data9ase 'arketing

development and maintenance of electronic databases to interact with past, present and4orpotential customers and others in the marketing channel

maintain value3ladden relationships

7o !re ire&t and igita( Marketing ata9ases UsedD

Marketing organisations use their databases in a number of ways2

;. identifying prospects

=. deciding which customers should receive

;. a particular offer

=. deepening customer loyalty

B. reactivating customersE. data mining

@e&ture 12/

So&ia( and #thi&a( Issues in Marketing/ ! number of social and ethical issues arise from marketing practice and emerge as areas

of attention for marketing scientists and regulators.

These matters generate considerable criticism of marketing practice, some of which is

%ustified but much of which is not.

The I'pa&t o Marketing on Indi)idua( Consu'ers/

'onsumer worries include2

high prices

poor3quality

dangerous products



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misleading advertising claims

deceptive practices

breaches of privacy

high3pressure selling

planned obsolescence poor service to disadvantaged consumers

The I'pa&t o Marketing on So&iet*/

The marketing system has been accused of adding to several -evils+ in society2

false wants and over concern with materialism.

too few social goods.

cultural pollution.

too much political power.

Marketing=s I'pa&t on Other .usinesses/There are three ma%or problems involved2

acquisition of competitors

marketing practices that create barriers to entry

unfair competitive marketing practices

%ri)ate and %u9(i& !&tions to Regu(ate Marketing/

There are movements that attempt too ensure that2

ethical business practices are adopted

particularly at times when executive salaries seem to be disproportionately high or when

fraud and misappropriation of company monies are uncovered e.g. &nron

The two ma%or movements are2

'onsumerism, an organised movement of citi>ens and government agencies whose aim is

to improve the rights and power of buyers in relation to sellers

&nvironmentalism, an organised movement of concerned citi>ens, businesses and

government agencies seeking to protect and improve people+s living environment

Consu'eris'/

'onsumerism is an organised movement of citi>ens and government agencies to improve the

rights and power of buyers in relation to sellers

1hy the push for consumerism groupsardous,

marketing organisations have raised consumers+ expectations

#n)iron'enta(is'/

False 1ants and Too Much Materialism



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Too Much $olitical $ower

Too Few (ocial 7oods

'ultural $ollution

&co3(ystems

$ollution "ong3Term

#thi&a( Marketing/

approach by which organisations recogni>e that the task of marketing is to be both

enlightened to society+s views and ethical in the organisations+ approach to society as a

whole and to customers.

most organisations respond positively to consumerism and environmentalism.

develop corporate marketing ethics policies.

!dopting #thi&a( Marketing/

(ocietal marketing is a principle of enlightened marketing which holds that an organisation

should make marketing decisions by considering consumers wants, the organisations

requirements and the long term interests of consumers and society.

Makes marketing decisions by considering2

consumer+s wants and interests,

the company+s requirements and

society+s long term interests.

$roducts may be classified according to their degree of immediate customer satisfaction and

long3term consumer benefit2 deficient products, products such as bad tasting and ineffective medicine that have

neither immediate appeal nor long term benefits

pleasing products, products that give high immediate appeal nor long term benefits

salutary products, products that give high immediate satisfaction, but they may hurt

consumers and society in the long run

desirable products, products that give both high immediate satisfaction and high long

term benefits

%!RT T7R##/ ##@O%IN$ T7# M!R"#TIN$ MIG

C7!%T#R NIN#/ N#5 %ROUCTS

1. Identify the challenges companies face in creating a new-product development strategy.

! ne produ&t is a product that is new in any way for the company concerned. t can be6



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1. Ne! t the !rld "nn$at"ns

;. Ne! cate#r% entr"es

ack * tp mana#ement

cmm"tment

Must ha$e an ade+uate )ud#et

t meet sales #als

Ne-produ&t de)e(op'ent3 the dev of original products, product improvements, product

modifications and new brands through the company+s own )Q/ efforts.

'ommon reasons for ne produ&t ai(ureinclude the inability of potential consumers to see the

product concept or how it might apply to them, no perceived need or perceived inferior product,

wrong timing, poor market research and poor marketing implementation as well as inadequate

promotional budget and lack of support.



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To create su&&essu( ne produ&ts, a company must understand its consumers, markets and

competitors and develop products that deliver superior value to customers. M orgs also need to

understand how leading3edge users and opinion leaders are involved in spreading positive word

of mouth in the diffusion process.

Cha((enges2

Keen cmpet"t"n

Meet"n# #r!"n# sc"al and #$ cnstra"nts

Man% cmpan"es cannt ard r ra"se the *unds needed *r ne! prduct

de$elpment

"#h de#ree * cmple3"t% and a mult"tude * dec"s"ns

&n"ct"n# set * m#t demands that prduct "nn$atrs must cmpl% !"th

The ne-produ&t de)e(op'entpro&essconsists of C stages2

1. ideas generation,;. ideas screening,


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Suppl"ers

deas screening 3 (creening new product ideas in order to spot good ideas and drop poor ones as

soon as possible. t aims to reduce the number of ideas as product development costs rise greatly

in later stages. The company only wants to go ahead with the product ideas that will turn into

profitable products.

S&reening&riteria includes6

&mpan% )=ect"$es

0rduct"n capac"t%

0rduct"n capa)"l"t%

Market"n# capa)"l"t%

0rduct r"sk

0rduct (t

'oncept development Q testing involves testing new product concepts with a group of target

consumers to find out if the concepts have strong &onsu'er appea(. t considers2

1. ProductideaAn "dea *r a pss")le prduct that the cmpan% can see "tsel*er"n# t the market.

;. Product concet- a deta"led $ers"n * the "dea stated "n terms that aremean"n#*ul t custmers. The "dea that cnsumers *a$ur prducts that erthe mst +ual"t%, per*rmance and *eatures and that the r#an"sat"n shuldthere*re de$te "ts ener#% t mak"n# cnt"nuus prduct "mpr$ements.

ed vehicle designed as a second family car to be used

around town ideal for loading groceries and hauling children, and easy to enter.

Con&ept 2La medium3cost, medium3si>ed car designed as an all3purpose family car.

Con&ept ALa medium3cost sporty compact appealing to young people.

Con&ept 4Lan inexpensive sub3compact appealing to conscientious people who want basic

transportation, low fuel cost and low pollution.

3. Outline how a potential product advances from a concept to a product through marketing

strategy development, usiness analysis and product development.



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Marketing strategy development 3 /esigning an initial marketing strategy for a new product

based on the product concept, i.e. the process of designing an initial marketing strategy for a new

product. t consists of B parts2

1. Descr")e target market, planned roduct ositioning, and the sales,

market shareand pr(t goals*r the (rst *e! %ears

;. Outl"ne prduct6s planned rice, distributionand marketing budget*r the(rst %ear.


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o Controlled test markets- se$eral research (rms keep cntrlled panels* stres that ha$e a#reed t carr% ne! prducts *r a *ee. The cmpan%!"th the ne! prduct spec"(es the V * stres and the #e lcat"ns "t!ants. The research (rm del"$ers the prduct t part"c"pat"n# stres andcntrls shel* lcat"n, amunt * shel* space, d"spla%s and p"nt-*-

purchase prmt"ns and pr"c"n#, accrd"n# t spec"(ed plans. Salesresults are tracked t determ"ne the "mpact * these *actrs n demand.Take less t"me than standard test markets Q usuall% cst less.

o Simulated test markets- &mpan% r research (rm sh!s a sample *cnsumers the ads and prms *r a $ar"et% * prducts, "ncl the ne!prduct )e"n# tested. The cnsumers are #"$en a small amunt * mne%Q are "n$"ted "nt a real r la) stre !here the% ma% keep the mne% ruse "t t )u% "tems. The cmpan% ntes h! man% cnsumers )u% thene! prduct and cmpet"n# )rands. Th"s pr$"des a measure * tr"alpurchase and assesses the cmmerc"al6s eect"$eness a#a"nst cmpet"n#cmmerc"als. &nsumers are then asked the reasns *r the"r purchase r

nn-purchase. Sme !eeks later the% are "nter$"e!ed t determ"neprduct att"tudes, usa#e, sat"s*act"n Q repurchase "ntent"ns.

'us"ness markets? prduct-use tests.

$. Evaluatethe product life-cycle theory, detailing the e#tent to which you accept the

se%uence of the introduction, growth, maturity and decline stages.

%rodu&t (ie &*&(e3 The course of a product+s sales and profits during its lifetime. &ach product

has a life cyclemarked by a changing set of problems and opportunities. Management+s goal is

to maximise lifetime and sales. 'ompany needs to recover all )Q/ costs. The sales of the

typical product follow an (3shaped curve made up of : stages. &xact shape and length is notknown in advance.

1. The c%cle )e#"ns !"th theproduct deelopment stage!hen the cmpan% (ndsand de$elps a ne! prduct idea.

;. The introduction stage"s marked )% slo# gro#thand lo# ro$tsas theprduct "s )e"n# pushed "nt d"str")ut"n. The ne! prduct "s (rst d"str")uted andmade a$a"la)le *r purchase.


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Frecast"n# prduct per*rmance r *r de$elp"n# m strate#"es presents sme

pract"cal pr)lems

Mana#ers ma% ha$e tru)le "dent"*%"n# !h"ch sta#e * the 0>& the prduct "s "n

D"cult t *recast the sales le$el at each 0>& sta#e, the len#th * each sta#eand shape * the 0>& cur$e

et !hen used care*ull%, the 0>& cncept can help "n de$elp"n# #d m

strate#"es *r d" sta#es * the 0>&.

Stage 'licationIntrduct"n Starts !hen the ne! prduct "s (rst launched

0r(ts are ne#at"$e r l! )c * l! sales and h"#h d"st and

prmt"n e3penses

(oals) "n*rm cnsumers * the ne! prduct Q #et them ttr% "t

Fcus sell"n# n thse )u%ers !h are the read"est t )u%-usuall% the h"#her-"ncme #rups

Strategy *)M#t m"#ht launch the ne! prduct !"th a h"#h

pr"ce and l! prmt"n spend"n#. "#h pr"ce helps t rec$eras much #rss pr(t per un"t as pss")le and l! prmspend"n# keeps m spend"n# d!n.!+sed #hen)the m "s ltd "n s"e, !hen mst cnsumers "n them kn! a)ut the prduct and are !"ll"n# t pa% a h"#h pr"ceand !hen there "s l"ttle "mmed"ate ptent"al cmpet"t"n.

Strategy ,)"ntrduce "ts ne! prduct !"th a l! pr"ce andhea$% prm spend"n#. Th"s prm"ses t )r"n# the *astest mpenetrat"n and h"#hest m share.!+sed #hen)m "s lar#e, ptent"al )u%ers are pr"ce sens"t"$eand una!are * the prduct, ptent"al cmp "s strn# and the

c6s un"t manu*actur"n# csts *all !"th the scale * prduct"n

J


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and accumulated manu*actur"n# e3per"ence.

Gr!th Earl% adpters !"ll cnt t )u% and later )u%ers !"ll *ll! the"r

lead, esp "* the% hear *a$ura)le !rd * muth

Attracted )% the pprtun"t"es *r pr(t, ne# cometitors!"ll

enter the m

The%6ll "ntrduce ne! prduct *eatures and the m !"ll e3pand

W "n cmps 7 W V d"st utlets and sales =ump =ust t )u"ld

reseller "n$entr"es

Pricesrema"n !here the% are r *all nl% sl"#htl%

&mpan"es keep the"r romo sending at the same r asl"#htl% h"#her le$el? educat"n# the m rema"ns a #al )ut n!the c must als meet the cmp

In high!tech m, the earl% #r!th sta#e "s t%p"(ed )% n"chestrate#"es !"th custmer-ta"lred slut"ns e.#. spreadsheetpacka#es !ere (rst tar#eted at (nanc"al pr*ess"ns nl%. .

Dur"n# rap"d #r!th, strate#"es chan#e t!ards mre mass!marketslut"ns "n$l$"n# a cmmn standard "n*rastructure.E.#. enrmus #r!th "n laser and "nk =et pr"nters t mult"-)"ll"n dllar "ndustr% led )% e!lett 0ackard reects th"s. 0#eared up *r hu#e prduct"n and e3tended d"st channels andkept dr"$"n# *r l!er pr"ce p"nts.

Pro$ts"ncrease dur"n# th"s #r!th sta#e as prm csts arespread $er a lar#e $lume and un"t manu*actur"n# csts *all.

The c uses se$eral strategiest susta"n rap"d m #r!th asln# as pss")le:

-"mpr$es prduct +ual"t% and adds ne! prduct *eatures andmdels.-enters ne! m se#ments and ne! d"st channels.-sh"*ts sme ad$ert"s"n# *rm )u"ld"n# prduct a!areness t)u"ld"n# prduct"n cn$"ct"n and purchase-l!ers pr"ces at the r"#ht t"me t attract mre )u%ers.

& *aces trade!of)! h"#h m share and h"#h current pr(t: )%spend"n# a lt n prduct "mpr$ement, prm andd"str")ut"n, "t can capture a dm"nant ps"t"n )ut "t #"$es upthe ma3 current pr(t "n the hpe * mak"n# th"s up "n the ne3tsta#e.

Matur"t% Th"s sta#e lasts longerthan pre$"us sta#es and pses strn#challen#es t market"n# mana#ement



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Most roductsare "n the matur"t% sta#e * the 0>&

-igh!tech roducts re+u"re a chan#e "n strate#% t!ardsmre custm"sed slut"ns that *cus n spec"(c adaptat"ns* the "n*rastructure *r added $alue thru#h mass

custm"sat"n.

M e"tension ccurs thru#h mre tar#eted n"che-)asedstrate#"es e.#. mst marketers * pr"nters tar#et hme users!"th a l!-cst "nk-=et pr"nter that autmat"call% cnnects t ad"#"tal camera and e$en d"spla%s d"#"tal phts. &mpan"essuch as 'rther and 0 cnduce n"che campa"#ns prmt"n#the"r cmpact, prta)le pr"nters t appeal t thse !"th ltdspace, mult"*unct"n de$"ces *r thse !h d nt ha$e a *a3,and h"#her-per*rmance clur pr"nters *r peple !ant"n# tcreate the"r !n prmt"nal mater"al.

Sl!d!n "n sales #r!th results !hen man% prducers ha$eman% prducts t sell 7 th"s overcaacity leads t Xcmpet"t"n

Cometitorsmark d!n pr"ces, "ncrease the"r ad$ert"s"n# andsales prms and push up RQD )ud#ets t (nd )etter $ers"ns* the prduct. These 7 drp "n pr(t.

Sme * #eaker cometitors drp ut Q e$entuall% the"ndustr% cnta"ns nl% !ell esta)l"shed cmpet"trs

'ttack "s the )est de*ence s prduct mana#ers shuld

cns"der md"*%"n# the market, prduct and the market"n# m"3.1. Market md"(cat"n:

-c tr"es t "ncrease cnsumpt"n * the current prduct )%lk"n# *r ne# usersand ne# m segments. E.#. Yhnsn Q

Yhnsn tar#eted the adult m !"th "ts )a)% p!der andshamp.-Als lk *r !a%s t "ncrease usa#e amn# resentcustomers. E.#. Glden &"rcle ers rec"pes and cn$"ncescustmers that canned *ru"t "s #d and eas% t use.6-Ma% als !ant t reosition the brandt appeal t a lar#err *aster #r!"n# se#ment. E.#. Nesca*e appealed t the)each-#"n# se#ment )% er"n# tr"als * "ced cee as a cland re*resh"n# dr"nk, a"m"n# t "ncrease "ts usa#e )e%nd r"nksat cee lun#es and "n cler !eather.

;. 0rduct md"(cat"n: chan#e a prduct6s characteristics-+ual"t%, *eatures * st%le t attract ne! users and mre usa#e.


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Decl"ne Decl"ne ma% )e slo# e.#. canned *ds acrss the#l)e r rap"d as *r 5&R #ames

.easons: technl#"cal ad$ances, sh"*ts "n cnsumertastes and "ncreased cmpet"t"n.

As sales and pr(t decl"ne, sme c6s #ithdra# *rmthe m. Thse rema"n"n# m"#ht reduce the V * the"rprduct er"n#s, drp the smaller m se#ments andmar#"nal trade channels r cut the prm )ud#et andreduce the"r pr"ces *urther.

&arr%"n# a !eak prduct can )e $er% cstl% t the (rm-pr(t as !ell as hidden costs: "t ma% take up tmuch * m#t6s t"me, "t *ten re+u"res *re+uent pr"ceand "n$entr% ad=ustments, "t re+u"res ad$ert"s"n# andsales*rce attent"n that m"#ht )e )etter used t makehealth%6 prducts mre pr(ta)le, "ts *a"l"n#

reputat"n can cause custmer cncerns a)ut the cand "ts ther prducts.

'"##est cst ma% l"e "n the uture- keep"n# !eakprducts dela%s the search *r replacements, creates alps"ded prduct m"3, hurts current pr(ts and!eakens the c6s *thld n the *uture.

*st task: *r c6s "s t "dent"*% thse prducts "n thedecl"ne sta#e )% re#ularl% re$"e!"n# sales, m shares,cst and pr(t trends

,nd: *r each decl"n"n# prduct m#t must dec"de!hether t ma"nta"n, har$est r drp "t.

-Maintain7 )rand !9ut chan#e "n hpe thatcmpet"trs !"ll lea$e the "ndustr%. Or m#t ma% dec"det reps"t"n the )rand "n the )el"e* that "t !"ll m$e)ack "nt the #r!th sta#e-harvest7 reduc"n# $ar"us csts 2plant ande+u"pment, ma"ntenance, RQD, ad$ert"s"n#,sales*rce4 and hp"n# that sales hld up. I* success*ul,"t !"ll W the c6s pr(ts "n te shrt run.

Drp7 the prduct *rm the l"ne. It can sell "t t

JJ| M A R K E T I N G F O U N D A T I O N S


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anther (rm r s"mpl% l"+u"date "t at sal$a#e $alue.



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Fads3 Fashions that enter quickly, are adopted with great >eal, peak early and decline fast. Tend to attract

only a limited following. 5ften have a novel or quirky nature.

Fashion3 ! currently accepted or popular style in a given field. Fashions pass through many stages6

JL| M A R K E T I N G F O U N D A T I O N S

T a b l e 9 . 6 Summary of product life-cycle characteristics, objectives and strategies


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1. A small V * cnsumers taken "n "nterest "n smeth"n# ne! t set themsel$es apart

;. Other cnsumers )ecme "nterested ut * a des"re t cp% the *ash"n leaders


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(peeding up new product development through6

*% Se&uential roduct develoment! A ne! prduct de$ apprach "n !h"ch necmpan% department !rks "nd"$"duall% t cmplete "ts sta#e * the prcess)e*re pass"n# the ne! prduct aln# t the ne3t department and sta#e.

,% Simultaneous roduct develoment ! An apprach t de$ ne! prducts "n!h"ch $ar"us cmpan% departments !rk clsel% t#ether, $erlapp"n# thesteps "n the prduct de$ prcess t sa$e t"me and "ncrease eect"$eness.



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C7!%T#R T#N/ %RICIN$ CONSI#R!TIONS !N !%%RO!C7#S

1. 'iscuss how marketing o(ectives, marketing-mi# strategy and costs and other company

factors affect pricing decisions

Price- the amunt * mne% char#ed *r a prduct r ser$"ce, r the sum * the$alues cnsumers e3chan#e *r the )ene(ts * ha$"n# r us"n# the prduct rser$"ce.

It "s the nl% element * the m m"3 that prduces revenue, all ther elementsrepresent csts

Pricing structureusuall% c$ers d"erent "tems "n a (rm6s prduct l"ne

'd0ustments* prduct pr"ces t reect chan#"n# csts and demand and taccunt *r $ar"at"ns "n )u%ers and s"tuat"ns

the pr"ce the c char#es !"ll )e )et!een 1 that "s t l! t prduce a pr(t and1 that "s t h"#h t prduce an% DD



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Marketing ob%ectives (ome of the most common ob%ectives are2

Survival- l! pr"ce hp"n# t "ncrease DD

Current ro$t ma"imisation- set a pr"ce that !"ll ma3

pr(ts Market!share leadershi- ma"nta"n"n# dm"nance7

undercut cmpet"t"n )% sett"n# pr"ces as l! as pss")le

Product!&uality leadershi- char#e a prem"um 2h"#hpr"ce t c$er h"#h +ual"t% and h"#h cst * RQD4

1ther ob0ec

24108 marketing foundations summary notes

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