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Marketing
“The greatest pleasure in life is doing what people say you cannot do”. Walter Bagehot (1826-1877), British journalist
Marketing is the management process of predicting, identifying
and meeting the needs and wants of customers in a profitable
manner.
Market - Place or process whereby customers and suppliers trade. It exists where there is demand for a particular product. Where there is a willingness from businesses to supply these products Consumer Markets - Markets that cater for the needs and wants of private individuals. Suit the general population
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Industrial or Commercial Markets - Markets that cater for the needs and wants of organisations, other businesses and government
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How to market a product….? B
C E
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D F
G
The 4 P’s of marketing mix The marketing mix is the combination of various elements needed to successfully market a product.
PRODUCT, PRICE, PROMOTION, PLACE
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Product - the good or service being marketed to meet the needs and wants of customers. Price - how much customers have to pay to buy the product.
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Promotion - methods of informing, reminding and persuading customers to buy the product. Place - the distribution channels used to get the product to customers.
Product
Products can be tangible (physical products) or intangible
(services). Products must have value added in order to stand any
chance of success in the market place.
Consumer products
These are products that are purchased by private individuals for
their personal use.
* Fast moving consumer goods (FMCG) – are everyday
convenience products that are sold in retail outlets. Examples –
groceries, personal care, newspaper etc.
* Consumer perishables – are products that do not last for very
long time, such as fresh flowers or fresh seafood.
*Consumer durables – are products that are purchased irregularly
because they tend to last for relatively long time and/ or take up a
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relatively large proportion of a consumer’s income. Example ;
Furniture, automobiles etc..
* Speciality consumer products- are exclusive and expensive
products that often require a large amount of commitment in
both money and time. Examples : jewellery, residential property
etc.
Producer products
Producer products or industrial goods are those that are
purchased by businesses, rather than aimed at consumers. They
are used in the production process to help the running of the
business. Examples – raw materials, machinery, tools and other
equipment.
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Branding
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Branding is a form of differentiating a firm’s product from
those of its competitors
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Activity
Research and make a list of 20 Brands
Brand name Product Company Logo
iPhone Smart phone Apple Inc. USA
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Pricing
Pricing strategies
Cost-plus pricing
Competition-based pricing
Penetration pricing
Loss leader pricing
Price skimming or market skimming
Promotional pricing
Price discrimination
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Promotion
Promotion is a component of the marketing mix. It refers to
the methods used to inform, persuade or remind people
about its products, brands or business. It is the key
element of any marketing strategy.
Examples of promotion include sales promotion, branding,
raising publicity, and advertising campaigns.
Objectives of promotion
Inform – Informative promotions aim to alert the market
about a firm’s products, especially new ones.
Persuade – Persuasive promotions aim to encourage
customers to make a purchase, to switch from rival brands
and to create loyalty for the product or brand.
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Remind – Reminder promotion techniques are used to
retain customer awareness and interest of an established
product
Popular business Slogans
“Impossible is nothing” – Adidas
“The ultimate driving machine” – BMW
“The world’s local bank” – HSBC
“Just do it’” – Nike
“I’m Lovin It’ – Mc Donald’s
“Connecting People” - Nokia
Advertisement Media:
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Television
Radio
Internet
Newspaper
Magazines
Cinemas
Leaflets
Billboards
Media Advantages Disadvantages Examples
Television Millions of
people will see it.
The product
can be presented
in a very
attractive way.
Easy to reach
target audiences.
Expensive Food
Cars
Household
tools
Radio Cheaper than
TV.
Uses song or
Cannot use
visual message.
Expensive
Local
services
Shops
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tune which makes
ads memorable. compared to
others.
The advert
has to be
remembered.
Not as wide
audience as TV
Newspaper Can reach
many people.
Cheap for
local newspapers.
A lot of info
can be put into
the ad.
Adverts are
permanent*.
Not eye-
catching if they
are in black and
white.
Does not grab
reader’s attention.
Local
products
Cars
Banks
Magazines Can use
specialist
magazines to
reach onlytarget
audience.
Magazine ads
are in colour and
are more
attractive.
They are only
published once
per month/week.
More
expensive then
newspapers.
Perfume
sports
equipment
Fashion
clothes
Posters/billboards Permanent*
Cheap
Potentially
seen by anyone
who passes by
them.
Can easily be
missed.
No detailed
info can be
included.
Events
Products
bought by a
large section
of the
population
Cinemas Visual image Only seen by Toys for a
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shows product in
a positive way.
Fairly cheap.
Effective if
target audience
goes to see
particular films.
people who go to
watch films. children’s
film.
Leaflets Cheap
Given to a
wide range of
people.
Delivered to
people’s houses.
May contain
vouchers to
encourage readers
to keep the
advert.
Permanent*
May not be
read. Local
events.
Retail
stores like
Seven-Eleven
Internet Can be seen
by anybody
around the world.
Can store lots
of info.
Orders can
instantly be made.
Internet
searches may not
highlight the
website and it
could be missed.
Internet
access is limited
in some
countries.
Competition
from other
websites.
Security
issues may
Virtual
goods.
Services
such as
banking or
insurance.
Virtually
anything that
is not too
small.
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discourage people
from buying
online.
Others (delivery
vehicles or sides
of bags)
Cheap May not be
seen by everyone. Shops put
their names on
plastic bags.
Coca cola
use neon
signs.
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Different types of promotion Promotion is usually used to support advertising and to encourage new or existing customers to buy the product. Its main function is to boost sales in the short-term, but not in the long term. It is used to attract new customers. Here are some ways in which promotion is used: Price reductions: Involves sales or price reduction coupons.
Gifts: Gifts are placed in the packaging of the product to encourage consumers to buy it. (e.g. toys in McDonald's happy meal).
Competitions: A card may be put in the packaging allowing the consumer to enter contests such as the lottery.
After sales service: e.g. warranty services. It reassures the customers that if the product has a problem then they can go and fix it for free. This make the product more attractive than others without warranty.
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Free samples: Encourages people to try the product. It can
be included in other products as well. E.g. washing machine
comes with free washing powder
PLACE
Place refers to the distribution of a product, i.e. how products get
to the consumer.
The chain of distribution refers to the means of getting a product
to the customer.
Intermediaries are agents or firms that act as a middle person in
the chain of distribution between the manufactures and
consumers of a product.
The traditional chain of distribution consists of manufacturers,
wholesalers and retailers. A long chain of distribution will tend to
raise prices for the consumer since each intermediary adds a
profit margin to their price.
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Intermediaries:
Distributors are independent businesses that act as
intermediaries by specialising in the trade of products made by
certain manufacturers.
Agents (or brokers) are negotiators who help to sell a vendors
products, such as real estate agents selling residential and
commercial property for their clients.
Wholesalers are businesses that purchase large quantities of
products from a manufacturer and then separate or ‘break’ the
bulk-purchases into smaller units for resale, mainly to retailers.
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Retailers are the sellers of products to the general public (i.e.
consumers) that operate in outlets (or ‘shops’ in everyday
language).
Zero-level channel
A zero-level channel does not have any intermediaries, i.e. the
producer sells directly to the consumer. Examples include direct
mail, e-commerce, telesales and mail order.
Producer
Consumer
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One-level channel
A one-level channel has one intermediary, such as retailers or distributors being used to sell
products to consumers.
Two-level channel
A two-level channel has two intermediaries, such as the use of wholesalers and retailers to get
products to consumers.
Producer
Distributors
Consumer
Producer
Agents
Consumer
Producer
Retailers
Consumer
Producer
Wholesalers
Retailers
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Activity: Suggest with reasons, the best way to distribute the
following products
A. IBDP text books
B. Shampoo, tooth paste, tissue paper
C. BMW car
D. Luxury apartments
Consumer
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