marketing strategies foundation

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Introduction to MarketingStrategies

Chapter


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Marketing- set of processes for creating,communicating, and delivering value to customers andfor managing customer relationships in ways that benefitthe organization and its stakeholders.

Marketing begins with discovering unmet customer needs andcontinues with researching the potential market; producing a goodor service capable of satisfying the targeted customers; andpromoting, pricing, and distributing that good or service.

Throughout the entire marketing process, a successful organizationfocuses on building customer relationships.

The best marketers not only give consumers what they want buteven anticipate consumers needs before those needs surface.

Exchange process- activity in which two or more partiesgive something of value to each other to satisfy

perceived needs.

What Is Marketing?


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Utility: power of a good or service to satisfy awant or need

Create time utility by making a good or serviceavailable when customers want to purchase it.

Create place utility by making a productavailable in a location convenient for customers.

Create ownership utility through an orderlytransfer of goods and services from the seller tothe buyer.

How Marketing Creates Utility


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Evolution of the Marketing Concept


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Marketing concept- company-wideconsumer orientation to promote long-runsuccess.

Firm starts with analysis of customers needsand works backward to offer products thatfulfill them.

Explained by shift from sellers marketin

which goods and services are relativelyscarce tobuyers marketin which they arerelatively plentiful.

Emergence of the MarketingConcept


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20 million not-for-profits exist worldwide.

Apply marketing tools to reach audiences, securefunding, improve their images, and accomplishtheir overall missions.

Not-for-profit organizations operate in both public

and private sectors.

Sometimes partner with a profit-seeking companyto promote a message.

Not-for-Profit Marketing


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Non-Traditional Marketing


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1. Study and analyzepotential targetmarkets and choose

among them.

2. Create a marketing

mix to satisfy thechosen market.

Developing a Marketing Strategy


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Target market- group of people toward whom anorganization markets its goods, services, or ideaswith a strategy designed to satisfy their specificneeds and preferences.

Types of Markets

consumer (B2C) product: good or service that ispurchased by end users

business (B2B) product: good or service purchased to beused, either directly or indirectly, in the production ofother goods for resale

Selecting a Target Market


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Marketing Mix blends the four strategies to fit theneeds and preferences of a specific target market.Product strategy involves the nature of the product and its

package design, brand names, trademarks, and productimage.

Distribution strategy ensures that customers receive theirpurchases in the proper quantities at the right times andlocations.

Promotional strategy blends advertising, personal selling,

sales promotion, and public relations to achieve its goals ofinforming, persuading, and influencing purchase decisions.

Pricing strategy is setting profitable and justifiable prices forthe firms product offerings, sometimes subject to government

scrutiny.

Marketing Mix


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Standardization- offering the same marketingmix in every market.

Adaptation- developing a unique marketing

mix to fit each markets local competitiveconditions, consumer preferences, andgovernment regulations.

Mass customization- allows a firm to mass

produce goods and services while addingunique features to individual or small groups oforders.

Marketing Mix for InternationalMarkets


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Marketing research the process of collecting andevaluating information to support marketing decisionmaking. AC Nielson Consumer Research

Secondary data Previously published data from tradeassociations, advertising agencies, marketing researchfirms, and other sources.

Primary data Data collected through observation,surveys, and other forms of observational study.

Data mining computer searches of customer data todetect patterns and relationships.

Business intelligence activities and technologies forgathering, storing, and analyzing data to make bettercompetitive decisions

Marketing Research
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Market Segmentation Market segmentation the process of dividing a total

market into several relatively homogeneous groups.


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How Market Segmentation Works


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Geographic Segmentation Divides market into homogeneous groups on the basis of their

locations.

Demographic Segmentation

Divides market on the basis of various demographic or socioeconomic

characteristics: gender, income, age, occupation, household size,stage in the family life cycle, education, and ethnic group

Psychographic Segmentation

Divides consumer market into groups with similar psychologicalcharacteristics, values, and lifestyles. (VALS)

AIO statementspeoples verbal descriptions of various attitudes, interests,and opinions

Product-Related Segmentation

Divides market based on buyers relationship to the good or service.

based on benefits sought by buyers, usage rates, and loyalty levels

Segmenting Consumer Markets
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Geographic segmentation targetsgeographically concentrated industries.

Demographic, or customer-based,

segmentation a good or serviceintended for a specific organizationalmarket (i.e. healthcare).

End-use segmentation focuses onthe precise way a B2B purchaser willuse a product.

Segmenting Business Markets


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Product- a bundle of physical, service, andsymbolic characteristics designed to satisfyconsumer wants

Product Categories: Convenience products- items the consumer seeks to purchase

frequently, immediately, and with little effort

Shopping products- typically purchased only after the buyer has

compared competing products in competing stores Specialty products- items a purchaser is willing to make a

special effort to obtain

Product Strategy


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Product Classification


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Capital versus Expense Items Installations- major capital items such as new factories,

heavy equipment and machinery, and custom-madeequipment

Accessory equipment- includes less expensive andshorter-lived capital items than installations and involvesfewer decision makers

Component parts and materials- become part of a final

product Raw materials- farm and natural products used in

producing other final products

Supplies- expense items used in a firms daily operations

that do not become part of the final product

Classifying Business Goods


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Different from Goods

Intangible

Perishable

Difficult to standardize

Service provider is the service

Services


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Brand recognition- consumer is aware of the brand butdoes not have a preference for it over other brands

Brand preference- consumer chooses one firms brandover a competitors

Brand insistence- consumer will seek out preferred brandand accept no substitute for it (the ultimate degree of brand

loyalty)

Brand Loyalty


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Brand equity- added value that a respected andsuccessful name gives to a product

Brand awareness- product is the first one thatcomes to mind when a product category ismentioned

Brand Equity


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Distribution channel: path through whichproductsand legal ownership of themflowfrom producer to consumers or business users

Physical distribution: actual movement ofproducts from producer to consumers or

business users

Distribution Strategy


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Distribution Channels

Di t ib ti Ch l U i


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Direct Distribution Direct contact between producer and customer.

Most common in B2B markets.

Often found in the marketing of relatively expensive, complexproducts that may require demonstrations.

Internet is helping companies distribute directly to consumermarket.

Distribution Channels Using Marketing Intermediaries Producers distribute products through wholesalers and retailers. Inexpensive products sold to thousands of consumers in widely

scattered locations.

Lowers costs of goods to consumers by creating market utility.

Distribution Channels UsingMarketing Intermediaries


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Marketing Intermediaries


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Direct responseretailing

Internet retailing

Automaticmerchandising

Direct selling

Non-Store Retailing


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Promotion is the function of informing,persuading, and influencing a purchasedecision.

Integrated marketing communications (IMC)is the coordination of all promotional activities

media advertising, direct mail, personal selling,sales promotion, and public relationstoproduce a unified, customer-focused message.

Promotion

Objecti es of Promotional


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Objectives of PromotionalStrategies


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Advertising Media Pie


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Sales promotionconsists of forms of

promotion such ascoupons, productsamples, and rebatesthat supportadvertising andpersonal selling.

Sales Promotion


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A person-to-person promotional presentation toa potential buyer

Many companies consider personal selling the key to

marketing effectiveness. A seller matches a firms goods or services to the

needs of a particular client or customer.

Today, sales and sales-related jobs employ about 16

million U.S. workers. Businesses often spend five to ten times as much on

personal selling as on advertising.

Example: Selling to the government or military.

Personal Selling


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The Sales Process

Pricing Objectives in the


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Pricing Objectives in theMarketing Mix


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Skimming pricing Setting an intentionally high price relative to the prices of competing products

Helps marketers set a price that distinguishes a firms high-end product fromthose of competitors

Penetration pricing

Setting a low price as a major marketing weapon Often used with new products

Everyday low pricing and discount pricing Maintaining continuous low prices rather than relying on short-term price-cutting

tactics such as cents-off coupons, rebates, and special sales

Discount pricing - businesses hope to attract customers by dropping prices for aset period of time

Competitive pricing Reducing the emphasis on price competition by matching other firms prices

Concentrating marketing efforts on the product, distribution, and promotionalelements of the marketing mix

Alternative Pricing Objectives


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Price-quality relationships

Consumers perceptions of quality closely tied

to price

High price = prestige and higher quality

Low price = less prestige and lower quality

Odd pricing

Setting prices in uneven amounts or amountsthat sound less than they really are

Example: $1.99 or $299

Consumer Perceptions of Price

marketing strategies foundation

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