mm handouts 2

8/12/2019 MM Handouts 2

1/34

Chapter 12 : Setting product characteristics

A.

PRODUCT CHARACTERISTICS AND CLASSIFICATIONS

1. Product levels

Eg. In a hotel,

Core Benefit : rest and sleep

Basic product : bed, bathroom , towels

Expected product : clean bed, fresh towels, working lampAugmented product : (exceed customer expectation) bible, wi-fi, fragrance

Potential product : potential future offerings of the product

2. Product ClassificationDurability : Nondurable goods, Durable goods, Services

Consumer Goods Classification :

Convenience (eg. Fmcg), Shopping (eg. Furniture, clothing), Specialty (eg. Cars), Unsought (eg. Life insurance)

Industrial Goods Classification : Materials and parts, Capital items, Supplies/

business services


2/34

B. DIFFERENTIATION1. Product Differentiation

Product form

Features

Performance

Conformance

Durability

Reliability

Reparability

2. Design Differentiation3. Service Differentiation

Ordering ease

Delivery

Installation

Customer training

Customer consulting

Maintenance

C. PRODUCT AND BRAND RELATIONSHIP1. Product Hierarchy


3/34


4/34

Chapter 13 : Designing and Managing Services

A.NATURE OF SERVICES1. Service Sectors2. Categories of Service Mix

Pure tangible good

Good w/ accompanying services

Hybrid

Service w/ accompanying goods

Pure service

3. Service Distinctions


5/34

4. Distinctive Characteristics of ServicesIntangibility

Inseparability

VariabilityPerishability

B.MARKETING STRATEGIES FOR SERVICE FIRMS1. Customer Relationship Management

Profit tiersCustomer Empowerment

Co-production

2. Holistic Marketing for Services


6/34

C.MANAGING SERVICE QUALITY1. Customer expectations

2. Determinants of Service QualityReliability

Responsiveness

Assurance

Empathy

Tangibles


7/34

3. Best Practices Strategic Concept Top-Management Commitment High Standards Self-Service Technologies Monitoring Systems Satisfying Customer Complaints Satisfying Employees

D.MANAGING SERVICE BRANDS1. Differentiating Services2. Developing Brand Strategies for Services

Choosing Brand Elements

Establishing Image Dimensions

Devising Branding Strategy

E.MANAGING PRODUCT SUPPORT SERVICES1. Identifying and Satisfying Customer needs

Customer Worries: Failure frequency, Downtime,Out-of-pocket costs

2. Post sale service strategy


8/34

Chapter 14 : Developing pricing strategies and programs

A.UNDERSTANDING PRICING1. Changing pricing environment2. How companies price3. Consumer psychology and pricing

Reference Prices

Fair price Typical price Last price paid Upper-bound price Lower-bound price Competitor prices Expected future price Usual discounted price

Price-quality inferences

Price endings

Price cues

B.SETTING THE PRICE


9/34

1. Selecting the Pricing Objective : Survival Maximum current profit Maximum market share Maximum market skimming Product-quality leadership

2. Determining Demand Price Sensitivity Estimating Demand Curves Price Elasticity of Demand

3. Estimating Costs4. Analyzing competitors Price Cost Offers5. Selecting a Pricing Method

Markup pricing

Target-return pricing Perceived-value pricing Value pricing Going-rate pricing Auction-type pricing

6. Selecting the Final Price Impact of other marketing activities Company pricing policies Gain-and-risk sharing pricing Impact of price on other parties


10/34

C.ADAPTING THE PRICE1. Geographical Pricing

Countertrade

Barter Compensation deal Buyback arrangement Offset

2. Discounts/Allowances Cash discount Quantity discount Functional discount Seasonal discount Allowance

3. Promotional Pricing Loss-leader pricing Special-event pricing Cash rebates Low-interest financing Longer payment terms Warranties and service contracts Psychological discounting

4. Differentiated Pricing Customer-segment pricing Product-form pricing Image pricing Channel pricing Location pricing Time pricing

Yield pricing


11/34

D.INITIATING AND RESPONDING TO PRICE CHANGES1. Initiate Price cut

Low quality, fragile market share, shallow pockets, price war

2. Initiate Price IncreaseDelayed quotation, escalator clause, unbundling, reduction of discounts

3. Responding to competitors price changes

Marketing Channels

Sets of interdependent organizations involved in the process of making a product or service available for

use or consumption.

Marketing Strategy: PUSH & PULL

4Ps replaced by:

Solutions Information Value Access


12/34

Designing a Marketing Channel System:

Analyze customer needs

Establish Channel Objectives

Identify Major channel alternatives

Evaluate major channel alternatives

Retailing

It includes all the activities involved in selling goods or services directly to final consumers for personal,

non business use.

Major Retailer Type

Discount store Off-price retailer Superstore Catalog showroom Specialty store Department store Supermarket Convenience store


13/34

Chapter 17

Integrated Marketing Communications- a concept of marketing communications planning that recognizes

the added value of a comprehensive plan, that evaluates the strategic roles of a variety of communication

disciplines - for example, general advertising, direct response, sales promotion, and public relations- and

combines these disciplines to provide clarity, consistency, and maximum communications impact.

Marketing communications mix

1. Advertising print and broadcast ads, packaging outer, brochures and booklets, posters andleaflets, billboards, display signs

2. Sales promotion contests, games, sweepstakes, lotteries, premiums, gifts, sampling, fairs andtrade shows, coupons, rebates

3. Events and experiencessports, entertainment, festivals, causes, street activities4. Public relations and publicity press kits, speeches, seminars, annual reports, community

relations, lobbying

5. Direct marketing and Interactive marketing catalogs, mailings, telemarketing, websites,electronic shopping, tv shopping, blogs

6. Word of mouth marketingperson to person, chat rooms, blogs7. Personal sellingsales presentations, sales meetings, samples, fairs and trade shows

Macro model of communications process


14/34

Steps in developing effective communication process


15/34

Determining communications objectives

1. Category need2. Brand awareness3. Brand attitude4. Brand purchase intention

Design the communications

1. Determine message strategy whether to show rational, sensory, social or ego satisfactionbenefits

2. Determine creative strategyinformational or transformational3. Message sourcecredibility comes from likability, expertise and trustworthiness


16/34

Global adaptations of communications programmedepends on

1. Product2. Market segment3. Style4. Local or global emphasis

Selecting communication channels

1. Personal communication channelsadvocate channels, expert channels and social channels.2. Non-personal communication channelsa) Media

b) Sales promotionc) Events and experiencesd) Public relations

Establishing total marketing communications budget

1. Affordable method2. Percentage of sales method3. Competitive parity method4. Objective and task method

a. Establish market share goalb. Determine the percentage of the market that should be reach by advertisingc. Determine the percentage of aware prospects that should be persuaded to try the brand.d. Determine the number of advertising impressions per 1% trial ratee. Determine the number of gross rating points that would have to be purchased.f. Determine the necessary advertising budget on the basis of the average cost of buying a gross

rating point.

Characteristics of marketing communications mix

1. Advertisingpervasive, amplified expressiveness and impersonality2. Sales promotioncommunication, incentive and invitation3. Public relations and publicity high credibility, ability of catch buyers off guard and

dramatization

4. Events and experiencesrelevant, involving and implicit5. Direct and interactive marketingcustomised, up to date and interactive


17/34

6. Word of mouth marketingcredible, personal and timely7. Personal sellingpersonal interaction, cultivation and response

Factors in setting marketing communication mix

1. Type of product marketb2c or b2b2. Buyer readiness stage3. Product life cycle

Five M of advertising

Advertising objectives at different stages in Hierarchy of Effects

Informative advertising

Persuasive advertising

Reminder advertising

Reinforcement advertising

Deciding on the Advertising Budget - Factors to consider when setting the advertising budget:

Stage in the product life cycle

Market share and consumer base

Competition and clutter

Advertising frequency


18/34

Product substitutability

Choosing the Advertising Message

1. Message generation2. Message execution - Rational positioning and Emotional positioning3. Message evaluation and selection - rate messages on:

Desirability

Exclusiveness

Believability

Types of advertising

1. Television ads2. Print ads3. Radio ads4. Film ads

Measuring the effectiveness of advertisements

Total Number of Exposures (E)

E=RxF

where R = reach, F = frequency

Known as Gross Rating Points (GRP)

Weighted Number of Exposures (WE)

WE = R x F x I

where R = reach, F = frequency,

I = average impact

Chosing among major media types depends on

1. Target audience media habits2. Product charecteristics


19/34

3. Message charecteristics4. Cost

Alternative advertising options

1. Place advertisingbillboards, public spaces2. Product placementsmovies, television serials3. Point of purchase advertisements

Selecting specific media vehicle depends on

1. Circulation2. Audience3. Effective audience4. Effective ad exposed audience

Deciding on media timing and allocation

Macro scheduling and micro scheduling

Micro scheduling depends on buyer turnover, purchase frequency and forgetting rate.

Advertising timing patterns

1. Continuity2. Concentration3. Flighting4.

Pulsing

Sales promotion

Sales promotion objectives:

1. Obtaining trial and repurchase2. Increasing consumption of an established brand3. Defending current customers4. Targeting a specific market segment

Customer oriented sales promotionsamples, coupons, premiums, contest/sweepstakes, refunds/rebates,

bonus packs, price offs, loyalty programmes, event marketing

Trade oriented sales promotionscontests and dealer incentives, trade allowances, point of purchase

displays, trade shows, cooperative advertising

Events and experiences


20/34

Objectives

1. To identify with a particular target market or lifestyle2. To increase awareness of company product or name3. To enhance corporate image4. To create experiences and evoke feeling5. To express commitment to the community or on social issues

Major sponsorship decisions

1. Choosing events2. Designing sponsorship programs3. Measuring sponsorship activities-

a) Direct tracking of sponsorship related promotionsb) Quantitative researchc) Qualitative research

Public relations

Functions of public relations

1. Press relations2. Product publicity3. Corporate communications4. Lobbying5. Counselling

Marketing public relation functions

1. Launching new products.2. Repositioning a mature product


21/34

3. Building interest in a product category4. Influencing specific target groups5. Defending products that have encountered public problems6. Building the corporate image in a way that reflects favourably on its products

Major tools of marketing PR

1. Publications2. Events3. Sponsorships4. News5. Speeches6. Public service activities


22/34


23/34

There are generally 4 Stages of INTERNALIZATION. These are as given below:

There are FIVE modes of ENTRYinto the Foreign Markets. These are:

There are FOUR methods of DIRECT EXPORTING. These are as given below:

Domestic-based export department Overseas sales branch or subsidiary Traveling export sales representatives

Deciding whether to goabroad

Deciding which

markets to enter

Deciding how to enterthe market

Deciding on themarketing program

Deciding on themarketing organization


24/34

Foreign-based distributors or agents

Now, a firm must understand that the Global Marketing has its Advantages and

Disadvantages too.

o ADVANTAGES: Economies of scale Lower marketing costs Power and scope Consistency in brand image Ability to leverage Uniformity of marketing practices

o DISADVANTAGES: Differences in consumer needs, wants, usage patterns Differences in consumer response to marketing mix Differences in brand development process Differences in environment

While going Global, a firm has to understand, respect and make use of the Cultural

Dimensions in that part of the world.

Firms generally follow either of the International Product and Communication Strategies:


25/34

MODE OF COMMUNICATION: Communications can be divided into two based on

the mode of communication:

Communications Adaptation Dual Adaptation

PRICING: Pricing plays a very important role while successfully entering a new global

market. There are various choices that a firm can have based on how they want to decide

the price of their product or service.

Set a uniform price everywhere Set a market-based price in each country Set a cost-based price in each country

WHOLE-CHANNEL CONCEPT OF INTERNATIONAL MARKETING


26/34

CHAPTER 22

TRENDSin Marketing Practices

Reengineering

Outsourcing

Benchmarking

Supplier partnering

Customer partnering


27/34

MergingGlobalizing

Flattening

Focusing

Accelerating

Empowering

ORGANIZINGthe Marketing Department Functionally Geographically By product By brand By market Matrix By corporate/division

FUNCTIONAL ORGANIZATION:


28/34

Tasks Performed by Brand Managers Develop long-range and competitive strategy for each product Prepare annual marketing plan and sales forecast Work with advertising and merchandising agencies to develop campaigns Increase support of the product among channel members Gather continuous intelligence on product performance, customer attitudes Initiate product improvements

The Product Managers Interactions:

VERTICAL PRODUCT TEAM PM = Product Manager APM = Associate PM PA = Product Assistant


29/34

TRIANGULAR PRODUCT TEAM PM = Product Manager R = Market Researcher C = Communication Specialist

HORIZONTAL PRODUCT TEAM

PM = Product Manager

R = Market Researcher C = Communication Specialist S = Sales Manager D = Distribution Specialist F = Finance Specialist E = Engineer

PRODUCT/MARKETING-MANAGEMENT MATRIX SYSTEM:


30/34

ROLE OF MARKETING AT THE CORPORATE LEVEL: To promote a culture of customer orientation To be an advocate for the customer To assess market attractiveness To develop firms overall value proposition, the vision, and articulation of how it

proposes to deliver superior value to customers

TOP-RATED COMPANIES FORSOCIAL RESPONSIBILITY

Johnson & Johnson Coca-Cola Wal-Mart Anheuser-Busch Hewlett-Packard Walt Disney Microsoft IBM


31/34

McDonalds 3M UPS FedEx Target Home Depot

CAUSE-RELATED MARKETINGMarketing that links the firms contributions to a designated cause to customers engaging

directly or indirectly in revenue-producing transactions with the firm.

CORPORATE SOCIAL MARKETINGMarketing efforts that have at least one non-economic objective related to the social welfare

and uses the resources of the company and/or its partners.

BRANDING A CAUSE MARKETING PROGRAM Self-branded:Create Own Cause Program Co-branded:Link to Existing Cause Program Jointly branded:Link to Existing Cause Program


32/34

SOCIAL MARKETING CAMPAIGNS

Necessary Skills for Implementing Marketing Programs: Diagnostic skills Identification of company level Implementation skills Evaluation skills

SOCIAL MARKETING PLANNING PROCESS:

THE CONTROL PROCESS:


33/34

TYPES OF MARKETING CONTROL:

MARKETING AUDIT


34/34

Comprehensive, systematic, independent periodic examination of a companys or business

units marketing environment, objectives, strategies, and activities with a view to

determining problem areas and opportunities, and recommending a plan of action to improve

the companys marketing performance.

CHARACTERISTICS OF MARKETING AUDITS: Comprehensive Systematic Independent Periodic

mm handouts 2

Documents