marketing licenciatura 8 -...
TRANSCRIPT
MARKETING
2016
Instituto SuperiordeEstatística eGestãodeInformaçãoUniversidade NovadeLisboa
Licenciatura
GESTÃO DE INFORMAÇÃO
Part 7: Marketing Mix
7.1. Product and the Product Mix7.2 Price and Pricing Strategy
7.3 Place and Distribution
The marketing mix
• ‘The marketing mix is a recipe for effective marketing. Using the marketing mix when planning the marketing for a product allows for a consistent approach’
• Getting a good balance of the 4 Ps will mean an effective marketing campaign
Marketing 4P‘s
4Ps
Product Price Promotion PlaceMain usage Conditions Advertisement Strategic distribution/ sales
Side usage Rebate Sales Physicaldistribution/logistics
Additional usage Discount Sponsoring Location
Brand Leasing Sales promotion
Content Event
Quality PPR
Packaging
Marketing Mix - 7PClassical and new instruments
Product policy „product“
Equipment policy „physical facilities“
Communication policy „promotion“
Personnel policy „personnel“
Distribution policy „place“
Price policy „price“
Process policy „process“
Classical instrumentsNew instruments
Marketing Mix (4P‘s)Components of the marketing mix
Product policy Price policy Communication policy Distribution policy
§ Product innovations
§ Product improvements§ Product differentiation
§ Marking§ Naming
§ Service performance§ Assortment planning
§ Packaging
§ Price
§ Price deductions§ Rebates and discounts
§ Delivery conditions§ Payment conditions
§ Media advertisement
§ Sales promotion§ Direct marketing
§ Public relations§ Sponsoring
§ Personal communication§ Fairs and exhibitions
§ Multi-media communication§ Employee communication
§ Distribution systems
§ Sales organs§ Logistic systems
Marketing mix
Sub-markets and customer groups
Service marketing (from 4P’s to 7P’s)Comparison of 4P�s and 7P�s
advertisement
product
price
positioning
processmanagement
physical facilitiesprice
employees
advertisement product
positioning
4 P‘s of the classical consumption goods
marketing
7 P‘s of the service marketing
The marketing mix
• Decisions about Mkt Mix are based on the results of market research– problem-identification research– problem-solving research.
• There are two main sources of data - primary and secondary. – Primary research is conducted from scratch. It is
original and collected to solve the problem in hand.
The marketing mix
• Secondaryresearchalreadyexistssinceithasbeencollectedforotherpurposes.Itisconductedondatapublishedpreviouslyandusuallybysomeoneelse.– Secondaryresearchcostsfarlessthanprimaryresearch,butseldomcomesinaformthatexactlymeetstheneedsoftheresearcher.
• Methodologically,marketingresearchusesthefollowingtypesofresearchdesigns:– Basedonquestioning– Basedonobservations
The marketing mix
Based on questioning• Qualitative marketing research - generally used for
exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques
Based on questioning• Quantitative marketing research - generally used to draw
conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population -involves a large number of respondents - examples include surveys and questionnaires. Techniques include choice modelling, maximum difference preference scaling, and covariance analysis.
The marketing mix
Basedonobservations•Ethnographicstudies- bynaturequalitative,theresearcherobservessocialphenomenaintheirnaturalsetting- observationscanoccurcross-sectionally(observationsmadeatonetime)orlongitudinally(observationsoccuroverseveraltime-periods)-examplesincludeproduct-useanalysisandcomputercookietraces.
The marketing mix
Basedonobservations§ Experimentaltechniques- bynaturequantitative,the
researchercreatesaquasi-artificialenvironmenttotrytocontrolspuriousfactors,thenmanipulatesatleastoneofthevariables- examplesincludepurchaselaboratoriesandtestmarkets
The marketing mix
• Researchers often use more than one research design. – They may start with secondary research to get
background information, – then conduct a focus group (qualitative research
design) to explore the issues.– Finally they might do a full nation-wide survey
(quantitative research design) in order to devise specific recommendations for the client.
The marketing mix
1. What are the characteristics of products?
2. How can a company build and manage its product
mix and product lines?
3. How can a company make better brand
decisions?
4. How can packaging and labeling be used as
marketing tools?
Product
A product is defined as
"Anything that is capable of satisfying customer needs"
•The process by which companies distinguish their product offerings from the competition is called branding.•For most companies, brands are not developed in isolation - they are part of a product group.•A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they provide (e.g. Dell's range of personal computers or Sony's range of televisions).
Componentsof the Market Offering
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¨ Physical goods¨ Services¨ Experiences¨ Events¨ Persons¨ Places¨ Properties¨ Organizations¨ Information¨ Ideas
Five Product Levels
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Customer value hierarchy• Core benefit• Basic product• Expected product• Augmented product
Product Levels
Product hierarchy
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• Need family• Product family• Product class• Product line• Product type• Item
The Product and the Product Mix
Product classificationsDurability and Tangibility
Classification:Nondurable goodsDurable goodsServices
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Consumer-Goods Classification:Convenience goods
StaplesImpulse goodsEmergency goods
Shopping goodsHomogeneous shopping goodsHeterogeneous shopping goods
Specialty goods
Unsought goods
The Product and the Product Mix
Industrial- -Goods ClassificationMaterials and parts
Farm productsNatural productsManufactured materials and partsComponent materialsComponent parts
Capital itemsInstallationsEquipment
The Product and the Product Mix
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Supplies and business services
Maintenance and repair itemsOperating suppliesMaintenance and repair servicesBusiness advisory services
The Product and the Product Mix
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Product mix (Product assortment)
Product mix has a certain:WidthLengthDepthConsistency
The Product and the Product Mix
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Product Mapfor aPaper-ProductLine
The Product and the Product Mix
Brand decisionsWhat is brand?
AttributesBenefitsValuesCulturePersonalityUser
The Product and the Product Mix
Corporate Identity vs. Image
Differentiation of two perspectives
CorporateIdentity Image
Image from inside Image from Outside
Company
Branding policyTask steps of branding
Recognition of originator
Recognition
Popularity
Securitywhen buying
Customer Loyalty(Brand loyalty)
(origin)
Branding policy - Requirements for a BrandMajor tasks of branding policy: development of brand names and trademarks
1 Brand name/ marking
Product designPackagingTrademark
2 Brand protection
Protectability of branddifferentiation from
other brands
3 Distinctiveness
Difference in performance compared
with competitive offerings
4 Standards
Standardized QualityConsistently high Quality
5 Price stability
No specials, action prices or sales
6 Availability
Availability and widespreaddistribution
7 Publicity
Perception and recognition in the market
through advertising
Criteria and characteristics of a brand
Differentiation of TrademarksExamples according to trademark types
Word-Image Trademark
Highest conciseness bylogo and illustration of the peculiarity of the offer.
Word signs
Recognition by self-developed script. Easily represented in all media.
Image Trademark
Only work if you about to be published across years (through advertising)
Corporate IdentityThe total of all communication political measures, the behavior, appearance and market communication of a company
CorporateIdentity
Corporate IdentityDetailed presentation of the three activities of a company, aligned upon a corporate philosophy
Internal and external corporate communication: press releases, ads, posters, TV spots, staff newspaper, customer magazine, website, banners, Open house, company celebration, trade show appearance, packing design
Appearance:logo, fonts,color, layout
Behavior from inside to outside:to employees, customers and suppliers
Building Brand IdentityBrand bonding
Brands are not built by advertising but by the brandexperience
Everyone in the company lives the brand
Three ways to carry on internal branding –Employees must
UnderstandDesire, andDeliver on the brand promise
The Product and the Product Mix
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Brand EquityBrand awarenessBrand acceptabilityBrand preference
Aaker’s five levels of customer attitude:The customer will change brands, especially for price reasons. No brand loyalty.Customer is satisfied. No reason to change brands.Customer is satisfied and would incur cost by changing brand.Customer values the brand and sees it as a friend.Customer is devoted to the brand.
The Product and the Product Mix
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Value of Brand EquityBrand valuationCompetitive advantages of high brand equity:
The company will have more leverage in bargaining withdistributors and retailers because customers expect themto carry the brand.The company can charge a higher price than itscompetitors because the brand has higher perceived quality.The company can more easily launch extensions becausethe brand name carries high credibility.The brand offers some defense against price competition.
The Product and the Product Mix
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Branding gives the seller several advantages:Brand name makes it easier for the seller toprocess orders and track down problemsSeller’s brand name and trademark provide legalprotection of unique product featuresBranding gives the seller the opportunity toattract a loyal and profitable set of customers.Branding helps the seller segment markets.Strong brands help build corporate image,making it easier to launch new brands and gainacceptance by distributors and consumers.
The Product and the Product Mix
Branding Decision: To Brand or Not to Brand?
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Desirable qualities for a brand nameIt should suggest something about the product’s benefitsIt should suggest the product or service categoryIt should suggest concrete, “high imagery” qualitiesIt should be easy to spell, pronounce, recognize, and rememberIt should be distinctiveIt should not carry poor meanings in other countries and languages
The Product and the Product Mix
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PackagingPackage
Primary PackageSecondary PackageShipping Package
Factors which have contributed to the growing useof packaging as a marketing tool
Self- -ServiceConsumer affluenceCompany and brand imageInnovation opportunity
The Product and the Product Mix
Pricing Decisions
• Definition• Pricing strategies• Ten ways to �increase� prices
without increasing price -Winkler
Definition
• Price– The amount of money charged for a product
or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.
Goal 1: Identify and define internal factors affecting pricing decisions
Price Has Many Names
What is Price?
• Rent• Fee• Rate• Commission• Assessment
• Tuition• Fare• Toll• Premium• Retainer
What is Price?
• Dynamic Pricing on the Web allows SELLERS to:– Monitor customer behavior and tailor offers.– Change prices on the fly to adjust for
changes in demand or costs.– Aid consumers with price comparisons.– Negotiate prices in online auctions and
exchanges.
What is Price?
• Price and the Marketing Mix:– Only element to produce revenues– Most flexible element– Can be changed quickly
• Common Pricing Mistakes– Reducing prices too quickly to get sales– Pricing based on costs, not customer value
Factors to Consider When Setting Price
• Marketing objectives• Marketing mix strategies• Costs• Organizational
considerations
• Market positioning influences pricing strategy
• Other pricing objectives:– Survival– Current profit
maximization– Market share leadership– Product quality
leadership
Internal Factors
• Marketing objectives• Marketing mix strategies• Costs• Organizational
considerations
• Pricing must be carefully coordinated with the other marketing mix elements
• Target costing is often used to support product positioning strategies based on price
• Nonprice positioning can also be used
Internal Factors
• Marketing objectives• Marketing mix strategies• Costs• Organizational
considerations
• Types of costs:– Variable– Fixed– Total costs
• How costs vary at different production levels will influence price setting
• Experience (learning) curve affects price
Internal Factors
• Marketing objectives• Marketing mix strategies• Costs• Organizational
considerations
• Who sets the price?– Small companies: CEO or top
management– Large companies: Divisional
or product line managers• Price negotiation is common in
industrial settings where pricing departments may be created
Internal Factors
• Nature of market and demand
• Competitors� costs, prices, and offers
• Other environmental elements
• Types of markets– Pure competition– Monopolistic competition– Oligopolistic competition– Pure monopoly
• Consumer perceptions of price and value
• Price-demand relationship– Demand curve– Price elasticity of demand
External Factors
Goal 2: Identify and define external factors affecting pricing decisions
• Nature of market and demand
• Competitors� costs, prices, and offers
• Other environmental elements
• Consider competitors� costs, prices, and possible reactions
• Pricing strategy influences the nature of competition– Low-price low-margin strategies
inhibit competition– High-price high-margin strategies
attract competition• Benchmarking costs against the
competition is recommended
External Factors
• Nature of market and demand
• Competitors� costs, prices, and offers
• Other environmental elements
• Economic conditions– Affect production costs – Affect buyer perceptions of
price and value• Reseller reactions to prices must
be considered• Government may restrict or limit
pricing options• Social considerations may be
taken into account
External Factors
General Pricing Approaches
• Cost-Based Pricing: Cost-Plus Pricing– Adding a standard markup to cost– Ignores demand and competition– Popular pricing technique because:
• It simplifies the pricing process• Price competition may be minimized• It is perceived as more fair to both buyers and sellers
Goal 3: Contrast the three general approaches to setting prices
Cost-Based Pricing Example
- Variable costs: $20 - Fixed costs: $ 500,000- Expected sales: 100,000 units - Desired Sales Markup: 20%
Variable Cost + Fixed Costs/Unit Sales = Unit Cost$20 + $500,000/100,000 = $25 per unit
Unit Cost/(1 – Desired Return on Sales) = Markup Price$25 / (1 - .20) = $31.25
General Pricing Approaches
Goal 3: Contrast the three general approaches to setting prices
General Pricing Approaches
• Cost-Based Pricing: Break-Even Analysis and Target Profit Pricing– Break-even charts show total cost and total
revenues at different levels of unit volume.– The intersection of the total revenue and total cost
curves is the break-even point.– Companies wishing to make a profit must exceed
the break-even unit volume.
General Pricing Approaches
• Value-Based Pricing:– Uses buyers� perceptions of value rather than
seller�s costs to set price.– Measuring perceived value can be difficult.– Consumer attitudes toward price and quality have
shifted during the last decade.– Value pricing at the retail level
• Everyday low pricing (EDLP) vs. high-low pricing
General Pricing Approaches
• Competition-Based Pricing:– Also called going-rate pricing– May price at the same level, above, or below the
competition– Bidding for jobs is another variation of
competition-based pricing• Sealed bid pricing
Low High
Low
High
EconomyStrategye.g. …
Penetratione.g. …
Skimminge.g. …
Premiume.g. BA first class
Price
Quality
Pricing strategies
• Premium pricing• Uses a high price, but gives a good product/service
exchange e.g. Private Jets, The Ritz Hotel
• Penetration pricing• offers low price to gain market share - then
increases price• e.g. MEO- to attract new clients
• Economy pricing• placed at �no frills�, low price• e.g. Soups, spaghetti, beans - �economy� brands
• Price skimming• where prices are high - usually during introduction• e.g new albums or films on release• ultimately prices will reduce to the �parity�
• Psychological pricing• to get a customer to respond on an emotional, rather
than rational basis • .e.g 99p not £1.01 �price point perspective
• Product line pricing• rationale of a product range• e.g. MARS 32p, Four-pack 99p, Bite-size £1.2
• Pricing variations• �off-peak� pricing, early booking discounts,etc• e.g Grundig offers a �cash back� incentive for expensive
goods
• Optional product-pricing• e.g. optional extras - BMW famously under-equipped
• Captive product pricing• products that complement others• e.g Gillette razors (low price) and blades (high price)
• Product-bundle pricing• sellers combine several products at the same price• e.g software, books, CDs.
• Promotional pricing• BOGOF (Buy one, get one free)
e.g. toothpaste, soups, etc
• Geographical pricing• different prices for customers in different parts of
the world• e.g.Include shipping costs, or place onPLC
• Value pricing• usually during difficult economic conditions• e.g. Value menus at McDonalds
Ten ways to �increase� prices without increasing price - Winkler
1. Revise the discount structure2. Change the minimum order size3. Charge for delivery and special services4. Invoice for repairs on serviced equipment5. Charge for engineering, installation6. Charge for overtime on rushed orders7. Collect interest on overdue accounts
8. Produce less of the lower margin models in the line
9. Write penalty clauses into contracts10.Change the physical characteristics of the
product
Channel and Distribution Tactics
• Bucklin�s definition of distribution• Today�s system of exchange• Channel intermediaries• Six basic channel decisions• Selection consideration• Potential Influence Strategies - Frazier and
Sheth (1989)• Frequencies of use of influence strategies -
Frazier and Summers (1984)
A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a
product and its title from production to consumption
Bucklin - Theory of Distribution Channel Structure (1966)
Negotiation
Promotion
Contact
Transporting and storing
Financing
Packaging
Money
Goods
Today�s system of exchangePr
oduc
ers
Users
Channel intermediaries - Wholesalers
• Break down �bulk�• buys from producers and sell small quantities to
retailers• Provides storage facilities• reduces contact cost between producer and
consumer• Wholesaler takes some of the marketing
responsibility e.g sales force, promotions
Channel intermediaries - Agents
• Mainly used in international markets• Commission agent - does not take title of the
goods. Secures orders.• Stockist agent - hold �consignment� stock• Control is difficult due to cultural differences• Training, motivation, etc are expensive
Channel intermediaries - Retailer
• Much stronger personal relationship with the consumer
• Hold a variety of products• Offer consumers credit• Promote and merchandise products• Price the final product• Build retailer �brand� in the high street
Channel intermediaries - Internet
• Sell to a geographically disperse market• Able to target and focus on specific segments• Relatively low set-up costs• Use of e-commerce technology (for payment,
shopping software, etc)• Paradigm shift in commerce and consumption
Six basic channel decisions
• Direct or indirect channels• Single or multiple channels• Length of channel• Types of intermediaries• Number of intermediaries at each level• Which intermediaries? Avoid intrachannel
conflict
Selection consideration
• Market segment - must know the specific segment and target customer
• Changes during plc - different channels are exploited at various stages of plc
• Producer-distributor fit - their policies, strategies and image
• Qualification assessment - experience and track record must be established
• Distributor training and support
Potential Influence StrategiesFrazier and Sheth (1989)
• Indirect influence strategies - information is merely exchanged with channel member personnel
• Direct unmediated strategies - consequences of a poor response from the market are stressed
• Reward and punishment strategies - given to channel members and their firms
• Direct unweighted strategy or request -producer�s wishes are communicated . No consequences are applied or mentioned
• Direct mediated strategies - specific action is requested and consequences of rejection are stressed– e.g.1 control of retail pricing– e.g.2 minimum order size– e.g.3 salesperson training– e.g.4 physical layout of store– e.g. 5 territorial and customer restrictions