Marketplace and Quality Assurance Presentation - Vincent Chirchir
Marketing
1. Think Marketing !
PREPARED BY DR.MALIK SHOAIB AWAN
CONTACT NO. +8613231409015
GOVT.CHENGDE MEDICAL UNIVERSITY
BEIJING ,CHINA
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3. Contents
1= Marketing Mix and Key Marketing Activities
2=Developing Market Segmentation
3=Product Planning and Development
4=Promotion Mix : Advertising, Publicity,
Personal Selling and Sales Promotion
5=Distribution Planning and Pricing Strategy
8. Key Marketing Activities
Consumer Analysis Examination and evaluation of consumer
characteristics, needs, and purchase processes
Product Planning
Development and maintenance of products,
product assortments, product positions,
brands, packaging, options, and deletion of
old products
Price Planning Outlines price ranges and levels, pricing
techniques purchase terms, price
adjustments, and the use of price as an
active or passive factor
9. Key Marketing Activities
Distribution Planning
Establishment of channel relations, physical
distribution, inventory management,
warehousing, transportation, allocation of
goods, and wholesaling
Promotion Planning Combination of advertising, publicity,
personal selling, and sales promotion to
drive sales revenue
11. Product/Market Matrix
Market
Penetration
•The firm seeks to achieve growth with
existing products in their current market
segments, aiming to increase its market
Share
•Effective when the market is growing or not
yet saturated
Market
Development
•The firm seeks growth by targeting its
existing products to new market segments
•Effective when a local or regional business
looks to wider its market, new market
segments are emerging due to changes in
consumer life-style/demographics, and
innovative uses are discovered for a mature
Product.
12. Product/Market Matrix
Product
Development
•The firms develops new products
targeted to its existing market segments
•Effective when the firm has a core of
strong brands
Diversification . The firm seeks growth by targeting its
existing products to new market
segments.
• Diversification is utilized so that the
firm does not become overly dependent
on one product line
13. Market Segmentation
Market
Segment
The division of a market into
different homogeneous groups
of consumers
Should be:
• measurable
• accessible by communication and distribution channels
• different in its response to a marketing mix
• durable (not changing too quickly)
• substantial enough to be profitable
14. Types of Market Segmentation
Geographic
Demographic
Based on regional variables such as
region, climate, population density, and
population growth rate.
Based on variables such as age, gender,
ethnicity, education, occupation, income,
and family status.
15. Types of Market Segmentation
Psychographic
Behavioral
Based on variables such as values,
attitudes, and lifestyle
Based on variables such as usage rate
and patterns, price sensitivity, brand
loyalty, and benefits sought
16. Step in Planning A Segmentation Strategy
Determining
characteristics and
needs of consumers
for the product
category of the
company
Analyzing
consumer
similarities and
differences
Developing
consumer
group
profiles
Selecting
consumer
segment (s)
Positioning
company’s
offering in
relation to
competition.
Establishing
An
Appropriate
Marketing
plan
18. Products : Types of Goods
Types of Goods
Convenience
Goods
Shopping
Goods
Specialty
Goods
19. Convenience Goods
Convenience
Goods • Those purchased with a minimum of effort,
because the buyer has knowledge of
product characteristics prior to shopping
• The consumer does not want to search for
additional information (because the item
has been bought before) and will accept a
substitute rather than have to frequent
more than one store
20. Convenience Goods
Convenience
Goods
• Staples are low-priced items that are
routinely purchased on a regular basis,
such as detergent, milk, and cereal
• Impulse goods are items that the
consumer does not plan to buy on a
specific trip to a store, such as candy, a
magazine , and ice cream
• Emergency goods are items purchased
out of urgent need, such as an umbrella
during a rainstorm, a tire to replace a flat
or aspirin for a headache
21. Shopping Goods
Shopping
Goods
• Those for which consumers lack
sufficient information about product
alternatives and their attributes, and
therefore must acquire further
knowledge in order to make a
purchase decision
22. Shopping Goods
Shopping
Goods
• For attribute-based shopping goods
consumers get information about and then
evaluate product features, warranty,
performance, options, and other factors.
The goods with the best combination of
attributes is purchased. Sony electronics
and Calvin Klein clothes are marketed as
attribute-based shopping goods
• For price-based shopping goods
consumers judge product attributes to be
similar and look around for the least
expensive item/store
23. Specialty Goods
Specialty
Goods
• Those to which consumers are brand loyal.
• They are fully aware of these product
sand their attributes prior to making a
purchase decision.
• They are willing to make a significant
purchase effort to acquire the brand
desired and will pay a higher price than
competitive products, if necessary.
• For specialty goods, consumers will not
make purchases if their brand is not
available. Substitutes are not
acceptable.
25. Services
Rented-goods
Service
Owned-goods
service
Non-goods
Involves the leasing of a good for a specified
period of time. Examples include car, hotel room,
apartment, and tuxedo rentals
Involves an alteration or repair of a good owned by
the consumer. Examples include repair services
(such as automobile, watch, and plumbing), lawn
care, car wash, haircut, and dry cleaning
Provides personal service on the pan of the seller;
it does not involve a goods. Examples include
accounting, legal, and consulting services
26. Characteristics of Services
• The intangible nature of many services makes the
consumer's choice more difficult than with goods
• The producer and his or her services are often inseparable
• The perish ability of services prevents storage and increases risks
• Service quality may be variable
28. Characteristics
Product Life Cycle
Introduction Growth
Marketing objective
Attract innovators and
opinion leader to new product
Expand distribution and
Product line
Industry sales
Competition
Industry profiles
Customers
Product mix
Distribution
Pricing
Promotion
Increasing
None or small
Negative
Innovators
One or two basic models
Depends on product
Depends on product
Informative
Rapidly increasing
Some
Increasing
Affluent mass market
Expanding line
Rising number of outlets
Greater range of prices
Persuasive
29. Characteristics Maturity Decline
Marketing Objective Maintain differential
advantage as long as possible
a)Cut back;
b)Revive
c)Terminate
Industry sales Stable Decreasing
Competitions Substantial Limited
Industry profits Decreasing Decreasing
Customers Mass market Laggards
Product mix Full product line Best-sellers
Distribution Greatest number of outlets Decreasing number of
outlets
Pricing Full line of prices Selected prices
Promotion Competitive Informative
Product Life Cycle
31. New Product Planning
Idea
Generation
Product
Screening
• A continuous, systematic search for new
product opportunities
• It involves delineating sources of new
ideas and methods for generating them
• After the firm identifies potential
products, it must screen them
• Many companies use a new-product
screening checklist for preliminary
evaluation
32. GENERAL CHARACTERISTICS OF NEW
PRODUCTS
Profit potential
Existing
competition
Potential
competition
Size of market
Level of
investment
Patentability
Level of risk
MARKETING CHARACTERISTICS OF NEW
PRODUCTS
Fit with marketing capabilities
Effecting on existing products(brands)
Appeal to current consumer markets
Potential length of product life cycle
Existence of differential advantage
Impact on image
Resistance to seasonal factors
PRODUCTION CHARACTERISTICS OF NEW
PRODUCTS
Fit with production capabilities
Length of time to commercialization
Ease of product manufacture
Availability of labor and material resources
Ability to produce at competitive price
Screening Checklist
33. New Product Planning
Concept
Testing
Business
Analysis
•Concept testing presents the consumer with
a proposed product and measures attitude
sand intentions at this early stage of development
•Concept testing is a quick and inexpensive
way of measuring consumer enthusiasm
• Business analysis for the remaining product
concepts is much more detailed than product
Screening
• Because the next step is expensive and time
-consuming product development, critical use
of business analysis is essential to eliminate
marginal items
34. Factors Considerations
Short-run and long-run market shares of company and
competitors ; strengths and weaknesses of competitors ;
potential competitors ; likely competitive strategies in
response to new product by firm
Product planning(engineering , patent search , product
development , testing);promotion ; production ; distribution.
Time to re-coupe initial costs ; short and long-run total and
Business Analysis Variables
Demand projections
Cost projections
Competition
Required investment
Price/sales relationship ; short and long-run potential; speed of
sales growth rate ; of re-purchases ; channel intensity.
Total and per unit cost ; use o existing facilities and resources ;
Startup vs. continuing costs ; estimate of further raw materials
and other costs ; economies of scale ; channel needs ;break even
Point.
35. New Product Planning
Product
Development
Test
Marketing
• Product development converts a product idea
into a physical form and identifies a basic
marketing strategy
• It involves product construction, packaging
branding, product positioning, and attitude and
usage testing.
• Test marketing involves placing a product for
sale in one or more selected areas and
observing its actual performance under the
proposed marketing plan.
• The purpose is to evaluate the product and
pretest marketing efforts in a real setting prior
to a full-scale introduction
36. New Product Planning
Commercial-
ionization
• After testing is completed, the firm is ready
to introduce the product to its full target
market. This is commercialization and
corresponds to the introductory stage of the
product life cycle
• Commercialization involves implementing a
total marketing plan and full production
39. Factor Advertising Publicity Personal
selling
Sales
production
Audience Mass Mass Small(one to
one)
Varies
Message Uniform Uniform Specific Varies
Cost Low per viewer
or reader
None for media
space and time ; can
be moderate cost for
press releases and
publicity materials
High per
customer
Moderate per
customer
Sponsor Company No formal sponsor
in that media are not
paid
Company Company
Flexibility Low Low High Moderate
Control over content
and placement
High None High High
Credibility Moderate High Moderate Moderate
Promotion Mix
40. Four Key Steps to Advertise
Determine
message content
and devise an ad
Specify the
location of an ad
(media placement)
Outline a promotion
schedule
Choose how many
variations of a
basic message to
utilize
41. Things to Consider in Advertising
Waste
Reach
Waste is the portion of an audience that is
not in a firm's target market. Because
media appeal to mass audiences, waste
is a significant factor in advertising.
Reach refers to the number of viewers
or readers in the audience
42. Things to Consider in Advertising
Frequency
Message
permanence
Frequency is how often a medium can be
used. It is greatest for newspapers, radio, and
television, where ads may appear daily and
advertising strategy may be easily changed
Message permanence refers to the number
of exposures one advertisement generates
and how long it remains with the audience
43. Things to Consider in Advertising
Persuasive
impact
Clutter
Persuasive impact is the ability of a medium
to stimulate consumers. Television often has
the highest persuasive impact because it is
able to combine audio, video, color
animation, and other appeals.
Clutter involves the number of ads that are
contained in a single program, issue, etc. of
a medium. Clutter is low when a limited number
of ads is presented and high when many ads
are presented.
44. Situation Poor-response Good-response
Fire breaks out in a
company plant
Requests for information by
media are ignored
Company spokesperson explains the
cause of the fire and company
precautions to avoid it and answers
questions.
New product introduced Advertising is used without
publicity
Pre-introduction news releases,
product samples, and testimonials
are used.
News story about product
defects
Requests for information by media
are ignored, blanket denials are
issued, hostility is exhibited toward
reporter of story.
Company spokesperson states that
tests are being conducted on
products, describes procedure for
handling defects, and answers
questions.
Competitor introduces new
product
The advertising campaign is
stepped up
Extensive news releases, statistics,
and spokespeople are made
available to media to present
company's competitive features.
High profits reported Profits are rationalized and positive
effects on the economy are cited
Profitability is explained, data
(historical and current) are
provided, uses of profits are
detailed: research, community
Publicity : Poor and Good Response
45. Developing a Publicity Plan
Setting
objectives
Outlining
types of
publicity
Selecting
media
Creating
Publicity
messages
Timing
publicity
messages
46. Publicity Type Example
News publicity Macy's describes its decision to sell its stores in the Midwest
Business feature
article
Toyota explains its goals and objectives for the 2020.
Service feature
article
A trade association offers 10 tips on how to reduce home heating
costs.
Finance release General Electric distributes quarterly financial data about the
company.
Product release Intel announces its new, fast-speed microprocessor
Pictorial release Apple distributes photos showing all of its personal computer products and
related software
Background
editorial release
Mc Kinsey presents a biography of its president and his rise
throughthe company.
Emergency
publicity
The Red Cross makes a request for aid to tornado victims
Publicity Type
47. Type of
Objective
Illustrations
Demand-Oriented
Information
To fully explain all good and service attributes
To answer any questions
To probe for any further questions
Persuasion To clearly distinguish good or service attributes from those of competitors
To maximize the number of sales as a per cent of presentations
To convert undecided consumers into buyers
To sell complementary items, e.g., film with a camera
To placate dissatisfied customers
Reminding To ensure delivery, installation, etc.
To follow up after a good or service has been purchased
To follow up when a repurchase is near
To reassure previous customers when making a new purchase
Image-Oriented
Industry and
company
To maintain a good appearance by all personnel in contact with
consumers
To follow acceptable sales practices
Specific Personal Selling Objectives
49. Type Characteristics Illustration
Coupons Manufacturers or retailers advertise special
discounts for customers who redeem
coupons.
P&G mails consumers a 25-
cents-off coupon for Sure
deodorant, which can be
redeemed at any super market.
Refund or rebate A consumer submits proof-of-
purchase(usually to the manufacturer) and
receives an extra discount.
First Alert home fire alarms
provides$5 rebates to
consumers submitting proof of
purchase.
Samples Free merchandise or services are given
consumers, generally for new items
When Sunlight dishwashing
liquid was introduced, free
samples were mailed to
consumers.
Contests or
sweepstakes
Consumers compete for prizes by
answering questions (contests) or filling
out forms for random drawings of prices
(sweepstakes)
Publishers Clearinghouse
sponsors annual sweepstakes
and awards auto mobiles,
houses, and other prices.
Types of Sales Promotion
50. Types Characteristics Illustrations
Bonus or
multipacks
Consumers receive discounts for
purchasing in quantity
Some stores run I-cent sales
whereby the consumer buys one
item and gets a second one for a
penny.
Point-of-
purchase
displays
In-store displays remind customers
and generate impulse purchases
Chewing gum sales in
supermarkets are high because
displays arc placed at checkout
counters.
Special events Manufacturers or retailers sponsor
celebrity appearances fashion shows,
and other activities.
Virtually every major league
baseball team has an annual
"Old Timers 'Day," which
attracts large crowds.
Gifts Consumers are given gifts for making
a purchase or opening a new account.
Savings banks offer a range of
gifts for consumers opening
new accounts or expanding
existing ones
Types of Sales Promotion
51. •It helps attract customer traffic and maintain brand or store loyalty
•Quick results can be achieved
•Some forms of sales promotion (calendars, t-shirts , Pens etc) provide
value to the consumer and are retained by them; and these forms
can provide a reminder function
•Impulse purchases can be increased through in-store displays
Sales Promotion Advantages
52. •The image of the firm may be lessened if it continuously runs
promotions. Consumers may view discounts as representing a
decline in product quality and believe the firm could not sell its
offerings without them.
•When coupons, rebates, or other special deals are used
frequently, consumers may not make purchases if the items are
sold at regular prices. Instead, they will stock up each time there
is a promotion
Sales Promotion Disadvantages
53. •Sometimes sales promotions shift the focus away from the
product onto secondary factors. Consumers may be attracted by
calendars, coupons, or sweepstakes instead of by product
quality, functions, and durability. In the short run this generates
consumer enthusiasm. In the long run this may have adverse
effects on a brand's image and on sales, because a product-
related differential advantage has not been developed.
Sales Promotion Disadvantages
55. •Distribution planning is systematic decision making
regarding the physical movement and transfer of
ownership of a product from producer to consumer.
•It includes transportation, storage, and customer
transactions.
•Distribution functions are carried out through channel of
distribution , which is comprised of all the organizations or
people involved in the process.
•These organizations or people are known as channel
members or middlemen.
Distribution Planning
56. Characteristics Exclusive
Distribution
Selective
Distribution
Intensive
Distribution
Objectives Prestige image channel
control and loyalty,
price stability and high
profit margins
Moderate market
coverage, solid image
some channel control
and loyalty, good sales
and profits
Widespread market
coverage, channel
acceptance, sales
volume and profits
Channel members Few in number,
well-established
reputable stores
Moderate in number
well-established
better stores
Many in number, all
types of outlets
Customers Few in number,
trendsetters, willing
to travel to store,
brand loyal
Moderate in number
brand conscious
somewhat willing to
travel to store
Many in number
convenience-
oriented
Intensity of Channel Coverage
57. Characteristics Exclusive
Distribution
Selective
Distribution
Intensive
Distribution
Marketing
Emphasis
Personal selling
pleasant shopping
conditions good
service
Promotional mix
pleasant shopping
conditions, good
service
Mass advertising
nearby location
items in stock
Major
Disadvantages
Limited sales
potential
May be difficult to
carve out a niche
Limited channel
control
Examples Automobiles
designer clothes
caviar
Furniture clothing
watches
Groceries household
products magazines
Intensity of Channel Coverage
58. Factor Manufacturer Action Channel Member Action
New-product introduction
Thorough testing adequate
promotional support
Good shelf location and
space, enthusiasm for
product, assistance in test
marketing
Delivery Prompt filling of orders,
adherence to scheduled
dates
Proper time allowed for
delivery, shipments
immediately checked for
accuracy
Promotion Sales force training, sales force
incentives, development of
national advertising campaign,
cooperative programs
Attractive in-store displays
knowledgeable salespeople
participation in cooperative
programs
Product quality Product guarantees Proper installation and
servicing of products
Methods of Channel Cooperation
60. Price Planning
A Price
Price
Planning
Represents the value of a
good or service for both the
seller and the buyer
Systematic decision making
by an organization regarding
all aspects of pricing
61. Factors Affecting Pricing Decisions
Consumers Competitors Cost
Channel
Members Government
Total Effects
on Price
Decisions
62. Consumers and Price Decisions
Consumers
•The relationship between price and
consumer purchases and perceptions is
explained by two economic principles —
the law of demand and price elasticity of demand
•The law of demand states that consumers
usually purchase more units at a low price
than at a high price
•The price elasticity of demand defines the
sensitivity of buyers to price changes in
terms of the quantities they will purchase
63. Consumers and Price Decisions
Elastic Demand
In-elastic
Demand
•Elastic demand occurs if relatively small changes in
price result in large changes in quantity demanded
•Numerically, price elasticity is greater than 1
•With elastic demand, total revenue goes up when
prices are decreased and goes down when prices rise
•Inelastic demand takes place if price changes have
little impact on quantity demanded
•Price elasticity is less than 1
•With inelastic demand, total revenue goes up when
prices are raised and goes down when prices decline
64. Consumers and Price Decisions
Unitary
Demand
. Unitary demand exists if changes in price are
exactly offset by changes in quantity demanded,
so that total sales revenue remains constant.
. Price elasticity is 1
65. Competitors and Price Decisions
Competitors
•Another element contributing to the
degree of control a firm has over
prices is the competitive environment
within which it operates
66. Competitors and Price Decisions
Market-
Controlled
Price
environment
Company-
Controlled
Priced
environment
•Characterized by a high level of com-petition,
similar goods and services, and
little control over price by individual
companies
•Characterized by moderate competition,
well-differentiated goods and services, and
strong control over price by individual firms
67. Competitors and Price Decisions
Government-
Controlled
Price
environment
Characterized by prices set by the
government. Examples are public utilities ,
buses, taxis, and state universities
68. Channel Members and Price Decisions
Channel
Members
• A wholesaler or retailer can gain stronger
control over price by stressing its importance as
a customer to the manufacturer, refusing to
carry unprofitable product, stocking competitive
items, and developing strong dealer brands so
that consumers are loyal to the seller and not
the manufacturer.
• Sometimes retailers engage in selling against
the brand , whereby they stock merchandise
,place high prices on it, and then sell other
brands for lower prices. This is often done to
increase the sales of their own brands.
69. Channel Members and Price Decisions
Channel
Members
• To ensure channel member cooperation with
price decisions, the manufacturer needs to
consider four factors : channel member profit
margins, price guarantees, special deals, and
the impact of price increases
70. Government and Price Decisions
Government
Price fixing regulations
Prohibitions against price
discrimination among
channel members
Unfair sales acts :
predatory pricing
71. Cost and Price Decisions
Cost Cost of raw
materials and supplies
Labor cost
Advertising Cost
Distribution Cost
Pricing
Decisions
73. Price Strategy
Cost-based Price
Strategy
Demand-based
Price Strategy
The marketer sets prices after
researching consumer desires and
ascertaining the range of prices
acceptable to the target market
With a cost-based price strategy , the
marketer sets prices by computing
merchandise, service, and overhead
costs, and then adding the desired profit
to these figures
74. • The marketer sets prices in
accordance with competitors
• Prices may be below the market, at
the market, or above the market,
depending on customer loyalty,
services provided, image, real or
perceived differences between
brands or stores, and the
competitive environment
Competition-
based Price
Strategy
Price Strategy
75. Reference/Recommended Further Reading
Joel Evans and Barry Berman , Marketing in The 21st
Century , Prentice Hall . You can obtain this excellent book at this link
http://www.amazon.com/Marketing-21st-Century-Ninth/dp/159260143X/ref=sr_1_1?ie=UTF8&s=books&qid=1219802238&sr=1-1
76. End of Material
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