The Marketing Process
• The marketing process:
– Analyzing marketing
opportunities
– Selecting target markets
– Developing the
marketing mix, and
– Managing the marketing
effort
• Three key steps:
– Market segmentation
– Target marketing
– Market positioning
Figure 2.4
Identifying Your Competitors
• Companies or individuals which
provide similar products, services, or
benefits as perceived by your target
customer.
Types of Competition
Three Types
1. Direct (first level)
Companies or individuals that offer the same products or
services as perceived by the target customer.
2. Indirect (second level)
Companies or individuals that offer the same benefits as
perceived by the target customer.
3. Invisible competition
People or businesses that have the capacity or desire to
provide the same products, services or benefits that you do.
Competitive Intelligence
• Competitive intelligence (CI)
 The process of learning, collecting and using information about your
competitors for the purpose of growing your business.
• Requires a well-researched understanding of
 Your target customers
 Your current competition
 Your future customer
Competitive Touchpoint Analysis
A touchpoint is any contact that
your customer has with any
aspect of your competition.
Making a list of all the
touchpoints allows you to identify
your competitors’ strengths and
weaknesses.
The Competitive Edge
Niche or Focus Strategy
Three Broad
Competitive
Strategies
Differentiation Strategy
Cost Leadership Strategy
Competitor Analysis
Two methods to evaluate potential
competitors are:
1. Competitive test matrix
 A grid showing the strengths and weakness of your
competitors.
2. Competitive SWOT
 For each competitor, evaluate its internal strengths and
weaknesses and external opportunities and threats.
The Competition Life Cycle
Embryonic
Growth
Key Stages
of the
Life Cycle
Mature
Decline
Maturity
Growth
Embryo
Decline
COMPETITION
CUSTOMERS
Your Competitive
Positioning Strategy
Figure 5.4
TARGET MARKET
(6 - O’s)
SELLER’S MIX
(The P’s)
UNCONTROLLABLE FACTORS
*Demographics
*Globalization*Political
*Economy
*Environmental
* Research
*Legal
* Government * Technology * War * Terrorism
Reviewing the Outputs
Marketing Objectives & Strategy
Marketing Mix Elements
Product
Pricing
Place
Promotion
- Product types
- Product tangibility
- Product lifecycle
- New product development
- Price Elasticity (Sensitivity)
- Pricing strategies
(lifecycle/product type)
- Pricing policies
- Types of distribution
- Distribution strategies
(consumer & business)
- Types of promotion
- Promotional strategies
(consumer & business)
Analytic Tools:
• Research
• Balance & Gaps Assessment
• Measurement, Monitoring & Evaluation
The Four P’s of the Marketing Mix
• The marketing mix:
– Set of controllable,
tactical marketing
tools
– Product, price,
place, and
promotion
– Blended to produce
the desired response
in the target market
• Internal consistency
helps to be successful
• Represents the seller’s
view of the market
Figure 2.5
The 4 P’s Versus 4 C’s
• A different (buyer’s) way of looking at the four P’s
Product
Customer solution
Price
Customer cost
Place
Convenience
Promotion
Communication
Four Service Characteristics
• Service: any activity or benefit that one party can offer to another
that is essentially intangible and does not result in the ownership of
anything
Figure 10.5
Three Levels of Product
• Core product:
– Problem solving services or benefits of
consumers’ purchase
• Actual product:
– A product’s parts, quality,
features, design, brand name and
other attributes received
• Augmented product:
– Additional consumer services
and benefits built around core
and actual product
– Add value/ differentiate product
from competition
The Total Product Concept
A total bundle of physical, service, and symbolic
characteristics designed to satisfy customer wants.
Product
image
Brand
Warranty
and
service
10-3
Physical or
Functional
Characteristics
of a Good
or Service
Package
and
label
Marketing the Product: Brand Equity
Represents the value customers
(and the stock market) place on
the sum of the history the
customer has had with a brand.
Brand
Equity
Brand
awareness
Perceived
quality
Brand
association
Brand
loyalty
How well and
widely a brand is
known
Customer
assessment of
how well a product
meets
expectations
Connections
consumers make
between products
and their
perceptions
(Brand Image)
Level of
commitment a
consumer has to a
brand (familiar,
preference and
insistence)
10-11
Stages in the Product Life Cycle
A product’s progress through introduction,
growth, maturity, and decline stages.
Objective:
Stimulate Demand
Stimulate
purchase &
repurchase
Overlap of Life Cycle for
Products A and B
Protect volume
from competition
Protect volume from shifting
consumer preference
What is a Price?
• Price: the amount of money charged for a product or service, or the
•
•
•
•
sum of values exchanged for the benefits of having or using the
product or service
Also known as rent,
tuition, fee, fare, rate,
• Pricing best practices:
interest
– Develop a 1% pricing mindset
Historically, most pricing
– Consistently deliver more value
was dynamic, arrived at
through negotiation
– Price strategically, not
Fixed price policy more
opportunistically
recent
– Know your competition
Price is the only
– Make pricing a process
marketing mix element
that produces revenue
therefore it is a key
element in the strategy
Source: Paul Hunt, Strategic Pricing Division, The
Advantage Group, Toronto, Ontario
Costs
• Costs set the floor, or lowest amount that should be charged Ideally covering all costs plus margin for profit
• Fixed costs: costs that do not vary with production - overhead
(rent, utilities, insurance, management salaries)
• Variable costs: costs that vary directly with the level of
production (raw materials, labour, supplies)
• Total costs: the sum of fixed and variable cost. Average cost
to produce decreases as volumes increase (Economies of scale)
PRICE OPTIONS
•
•
•
•
•
•
•
Prestige
Odd
Externally Guided
Skim the Cream
Penetration
Full Cost
Demand
New-Product Pricing
• Market skimming pricing: setting a high price to skim
maximum revenues from segments willing to pay (new technology)
• Market penetration
pricing: setting a low
price for a new product
to attract a large number
of buyers and achieve a
large market share
•
Skimming price drops in steps
Advantage to be gained by
large volumes early in life
cycle
Figure 7.7
Price Adjustment Strategies
Discount and
Allowance pricing
Reducing prices to reward customer
responses such as paying early
Segmented
pricing
Adjusting prices to allow for differences
in customers, products, or locations
Psychological
pricing
Adjusting prices for psychological
effect; reference pricing
Promotional
pricing
Temporarily reducing prices
to increase short-run sales
Geographical
pricing
Adjusting prices to account for
geographic location of customers
International
pricing
Adjusting prices for
international markets
Table 12.2
Promotional Mix
• Promotional mix
The key to connecting with
customer is your promotional
mix—all the elements that you blend
to maximize communication with
your customer.
PROMOTION
• Direct marketing:
– Direct communications with targeted individuals to obtain an
immediate response and lasting customer relationships
• Integrated marketing
communications:
– Coordinating/integrating to
deliver a clear, consistent, and
compelling message on all
communication channels
– Leverage: the overall effect is
greater than the sum of its
parts
Steps in Developing Effective Communications
• Identifying the target audience:
– Will determine what, how, when, where, and who will say it
• Determining the desired response:
– Will depend on what “stage” of the purchase decision process the
buyer is presently at
Buyer Readiness Stages:
Figure 15.3
The stages that
buyers normally pass
through when
making purchase
decisions
PROMOTION
Advertising
Publicity
Personal Selling
Special Promotions
PROMOTION
Advertising
paid, non-personal
Institutional
Brand
Sales
Classified
Relationship between Advertising and the
Product Life Cycle
• For product advertising to be effective it must accomplish three key
objectives:
Inform
Growth
Remind
Maturity
Sales
Introduction
Persuade
Informative
Advertising
Persuasive
Advertising
Reminder-Oriented
Advertising
Time
Decline
PROMOTION
Publicity
not paid, non-personal
* high credibility
* off-guard
* dramatization
Public Relations
• Public relations:
–
–
–
–
Building good relations with the company’s various publics
obtaining favourable publicity,
building a good corporate image, and
handling or heading off unfavourable rumours, stories, and events
• Public relations functions:
–
–
–
–
–
–
Press relations
Product publicity
Public affairs
Lobbying
Investor relations
Development
• Public relations tools:
–
–
–
–
–
–
News, speeches
Special events
Mobile marketing
Published materials
Website
Public service activities
PROMOTION
Personal Selling
person-to-person
*Product awareness & preference
*Closing a sale
*Negotiating price and terms
* High end of preference scale
Customer Service and Quality
Some Market Facts
If you provide quality service, you can:
•
Charge up to 10 percent more for your product or servic

Increase sales growth

Reduce costs

Gain new customers

Make word-of-mouth advertising work for you
AND
• Increase Profits!
PROMOTION
Special Promotions
short term buy incentives
•Consumer
•Trade
•Sales-force promotions
Promotion
in
Cyberspace
Paid media
advertising
Promotional Mix
Working
visibly
Industry
Literature
Branding
Yourself
Trade
Shows
Business
Cards
Point-ofpurchase
displays
Promotional Mix
Catalogues
Discount
Coupons
Personal
Selling
Free Ink and
Free Air
Direct Mail
Money-Back
Guarantees
Integrated Marketing Communication (IMC)
Applied
Advertising
Purpose: Awareness and preference building
Timing: Introduction and Growth Stages
Types: Informative, Persuasive, Reminder, Retail
Sales
Promotion
Purpose: Incentive
Timing: Late Growth, Maturity, Decline Stages
Types: POP, Specialty, discount and loyalty programs
Public
Relations
Purpose: Fostering product and company goodwill
Timing: Introduction and Growth stages (builds credibility)
Types: Sponsorship, Publicity
Direct
Response
Purpose: Stimulate immediate sales
Timing: Introduction, Growth, Maturity Stages
Types: Direct Mail, Internet banners, TV
Personal
Selling
Purpose: Complex, customized sales, personal references
Timing: Introduction, Growth and Maturity Stages
Types: Order processing, Creative selling
Guerrilla Marketing
• Guerrilla Marketing
An important part of your promotional mix
will
be your “guerrilla marketing” promotional
strategies—unconventional methods of
getting the customer’s attention at minimal
cost.
Push Versus Pull Promotional Strategies
•
•
•
•
Refers to the direction of promotional effort
Exists as a range, yet most companies use a combination of both
Consumer goods use primarily pull; advertising
Industrial goods use primarily push; personal selling
Figure 15.4
Plotting Your Future
Checklist
 What is your marketing strategy?
 What prices will you charge?
 What are your promotional mix, goals and objectives?
 What stimulates your target market to buy or use your
product or service?
 What has your primary and secondary research told you
about promoting your business?
Plotting Your Future
Checklist
 Develop a promotional strategy for your business.
 How will you cost out your promotional budget?
 Does your business have a unique twist for a possible
publicity story?
 Why did you select the business name you are using?