Developing Marketing
Strategies
Stage 6 Business Studies
At a glance
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Market segmentation
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Product and service
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Price & pricing methods
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Promotion
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Place/distribution
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Environmental effects on distribution
Market segmentation
Gender
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In their book Why Men Don't Listen and Women Can't Read Maps, Barbara and
Allan Pease quote an interesting study.
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Conducted in five Western countries, asked men and women to describe the kind
of person they would ideally like to be.
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Men overwhelmingly chose adjectives such as bold, competitive, capable,
dominant, assertive, admired, and practical.
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From the same list women chose warm, loving, generous, sympathetic, attractive,
friendly, and giving.
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Understanding what each gender values can have an effect on every
communication you have with your customers.
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If you want a man to respect and trust your company, you may want to stress the
adjectives he uses to describe what he admires.
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If you want to win the respect of women, you may want to consider using the
adjectives she uses to describe qualities she admires.
Feminine vs. Masculine
the Dodge La Femme

1955. The United States and Panama sign the canal treaty, James Dean dies
in a car crash, and Scrabble makes a dramatic entrance into the board game
market.
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20 million American women were licensed to drive
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Chrysler rolls out the Dodge La Femme and hails it as the first and only car
designed for "your majesty, the modern American woman.”
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Not apparently, what the 1950s modern American woman had in mind; the
Dodge La Femme bombs and is pulled off the market the following year.
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Today, almost half a century later, the Dodge La Femme lives on as a
vintage car--a collector's item that offers both sentimental value and the
intriguing appeal of a somewhat tainted past.

To marketers, however, the Dodge La Femme is highly valuable as a shining
example of what companies shouldn't do when trying to create and market
products that they hope will appeal to women.
"Convenient pockets are provided on the
front seat backs and contain a set of lovely
rainwear created especially for Milady. This
consists of raincoat and hat made of fine
quality nylon in color matching the interior
of the car and flecked with gold to richly
enhance its chic appearance. A folding
umbrella is also provided and is covered with
the matching nylon material.
Age
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Consumer needs and wants change with age although they may still wish to
consume the same types of product. So Marketers design, package and
promote products differently to meet the wants of different age groups
Income
Lifestyle
Active
Running
Passive
Organic
Cycling
Interest
Fitness
Vitamins
Health
Herbal
Coffee
Tea
Cola
Beverage
Water
Product and service
Core
Product
Augmented
Product
Core Product
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Refers to the benefits the product offers to customers.
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A can of drink gets rid of thirst, a meal removes
hunger and a car gets you from point A to point B.
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Lots of businesses compete to provide the basic
benefit.
Augmented Product
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Quality
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Styling
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Warranty
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After sales service
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A brand name that can be trusted
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Provision of credit, including interest-free periods
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Packaging
Price & pricing methods
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Skimming strategies
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Penetration strategies
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Loss leaders
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Price points
Skimming strategies
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Skimming is a strategy where the business sets a relatively high
price at first and then lowers the price over time. This strategy
allows a business to recover its development strategies before
increased competition forces a lower market price.

Skimming strategies refer to pricing a product at what “the
market will bear”.

Nike, for example, conducts research to find the highest price
they can charge to maximise their revenue. The highest price
will vary between countries and so too does the Nike price.

When a product such as Playstation first came on the market,
it sold for more than $500 because there was simply no
competitive product on the market.
Penetration strategies
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Penetration pricing is a strategy where a business sets a lower price
(below its competitors) in order to increase market share. Usually
for a specific period of time.
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A successful penetration strategy will increase sales, increase
market share and usually lower per unit costs through economies
of scale.

Economies of scale are the cost reductions that occur from being
able to buy raw materials in bulk and mechanise processes.
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Penetration strategies are used to gain new market share at the
expense of competitors or regain lost market share.

It is important to remember that a penetration strategy will impact
on profit and needs to be carefully considered although the
increase in volume may lower the cost of producing the product
through the economies of scale
Loss leaders

Loss leaders are prices set at a very low level to
encourage consideration of a product newly introduced
to the market or to encourage customers to consider
other products.

Example: Mobile phones are offered for free or at a low
cost to subscribers who enter into a contract that is
typically between 12 and 24 months

Sometimes this strategy can approach “bait
advertising”, where a few products in a retail store are
priced at absurdly low prices to get customers into the
store.

Bait advertising is illegal.
Price points
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Customers think of a retail price as one of a number of
possible competitive prices.

It is purely psychological and refers to cut-offs in the minds of
customers. A price of $9.99 is below the psychological price
point of $10.

Example: Dell sells a range of computers from relatively
simple functions to very complex functions.


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Each model is carefully priced with a specific target market in
mind.
There is a range of price points.
The price point is the psychological price reference in the minds of
customers.
Low entry-level prices can create a perception of value for money
for the whole product range.
Promotion

Promotion is about effective communication with
customers.

A business could have the best product in the world but
will sell very few if customers are unaware the product
exists.
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There are a number of techniques a business can use to
communicate with its customers.
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Advertising
Personal selling
Advertising
Below-the-line promotions
Public relations
Advertising
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Paid communication with the target market and it is
usually designed to be persuasive.
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The marketer pays various types of media such as:
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Television
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Newspapers,
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Magazines
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Radio
Viral advertising
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Promotes products in such a way (usually humorous) that customers want to
send the advertisement (usually by e-mail) to friends.
Original Budweiser frogs
Cadbury gorillas
Personal Selling
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Personal selling occurs where an individual salesperson sells a
product, service or solution to a client.
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Salespeople match the benefits of their offering to the specific
needs of a client.

Use fewer resources, pricing is often negotiated as purchase tends
to involve large sums of money.
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Products tend to be fairly complex (e.g. financial services or new
cars).
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There is some contact between buyer and seller after the sale so
that an ongoing relationship is built.

Client/prospects need specific information – increasingly seen as a
partnership between the supplier and the retailer e.g Dulux &
Bunnings
Below the line promotion
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Are non-media promotions.
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Typically includes promotional activities such as:
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vouchers
special offers by a store,
loyalty card offers
competitions on the back of packaging.
Point of sale advertising is included when the marketing
department rather than an advertising agency develops it i.e. the
promotional material on display where the product is sold. It
includes things like display racks, displays, stands and posters
Are very cost effective promotions - includes special displays
in retail stores that are set up by the sales representatives.
Public relations
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PR is any purposeful communications between an
organisation and its publics that aim to generate
goodwill

PR is proactive and future orientated, and has the
goal of building and maintaining a positive
perception of an organisation in the mind of its
publics

Planned and sustained effort to establish and
maintain goodwill and mutual understanding
between an organisation and its publics
Qantas PR during recent
engine explosion incident
Sydney, 11
Qantas Update on
November 2010
QF32 and Qantas A380 Operations
2.00PM 5 NOVEMBER 2010 The Qantas B747-400 dispatched as a relief flight last
night to Singapore to bring passengers affected by yesterday's QF32 engine failure was scheduled to
depart Singapore at 10.30am local time. QF8032 is expected to arrive in Sydney at 8.45pm tonight.
UPDATED
A380
Update - Qantas Confirms International Network Availability
Qantas has
confirmed an updated schedule for its international network to ensure minimum
disruption to passengers following the grounding of its Airbus A380 fleet.
Sydney, 05
November 2010
Qantas Update on
Sydney, 08
November 2010
Qantas Continues A380
Engine Inspection Program
5 NOVEMBER 2010 Qantas' special relief flight was dispatched last night
from Sydney to bring passengers affected by yesterday's QF32 engine failure, and air return to
Sydney. This flight will depart Singapore at 10.30am local time.
Sydney, 05
Qantas is
continuing an intensive inspection program on all Rolls-Royce engines in its A380 fleet,
but operations will be recovered and significant disruptions to passengers should cease within the next
24 hours.
Sydney, 06
November 2010
90 Years as Australia's Leading Airline
Hollywood superstar John Travolta today
helped Qantas kick off its 90th anniversary celebrations,
with the first of a series of major events during November.
Sydney, 06
November 2010
November 2010
Qantas Refutes Engineers Union Claims
Qantas today
strongly refuted claims by the Federal Secretary of the Australian Licenced Aircraft
Engineers Association (ALAEA) that Qantas engineers had been stood down as a result of yesterdays
QF32 engine incident.
Sydney, 04
Qantas Celebrates
November 2010
Statement on
QF32 Air Return to Singapore - Aircraft has Landed Safely
A
Qantas A380 aircraft operating QF32 from Singapore to Sydney experienced an engine issue
soon after take off and returned to Singapore.
Sydney, 01
November 2010
QantasLink Q400
Update on Qantas Services
Qantas has
made updates to its scheduled services on Saturday 6 November and Sunday 7
November due to the grounding of its Airbus A380 fleet.

Sydney, 05 November 2010
QF32 and Qantas A380 Operations
UPDATED 6.30AM
A
Takes Taronga Western Plains Zoo to the Skies
QantasLink Bombardier Q400 aircraft showcasing the images of Taronga Western Plains Zoo
animals was welcomed to the airline's fleet today to help promote regional tourism.
Place/Distribution
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The place/distribution process is about allowing the
customers access to the product when they want it.
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The distribution channel links the point of
manufacturing to the final customer.
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In most cases the manufacturer will need intermediaries
such as wholesalers and retailers to reach the final
customer.
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As customers are widespread it would be very expensive
to deal directly with the each individual customer.
Imagine the cost to Edgell of sending a single can of
peas to a customer in Burke.
Distribution options
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Intensive
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Selective
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Chosen when the manufacturer wants to use as many
outlets as possible. Coca-Cola is an example
Used when the manufacturer wants the product widely
distributed but not quite to the degree of intensive
distribution. Groceries, clothing and furniture are examples
Exclusive
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Often made for products positioned at the top of the
market. With a high-quality product, the price indicates the
exclusivity, and the promotion and distribution also
supports the exclusivity. Example cars such as Rolls-Royce
Distribution issues
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Transport
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Cost-reduction advances in transport have been very
significant.
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The most important is standardisation of packaging to
ensure that pantechnicons and containers are fully
loaded and that a business is minimising its unit cost of
transport.
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Another significant cost saving is the adoption of pallets
and the fitting of automatic “roll on roll off ”
(RORO)conveyor belt technology to trucks. This means
the driver can load and unload without assistance.
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Warehousing
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The technological advances here have also led to
significant cost reductions.
Reductions are so considerable that a competitor must
follow when there is an upgrading in warehouse
technology e.g. Coles & Woolworths have completed
major distribution centres. These centres are very
different from the old sheds where goods used to be
warehoused. They are totally sealed, have no lights or
windows. They are totally automated and run by
computers. Very few people work in these centres and
they warehouse and distribute incredibly large amounts
of product.
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Inventory refers to the product stored in case
customers want it.
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Having a product available when the customer wants it
is an important aspect of customer service.
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It is also an important aspect of the total cost of the
product.
Environmental effects on
distribution
Technology
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Most significant changes (=significant cost reductions)
have been in the areas of:
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Containerisation,
Conveyor belt technology and automation of warehousing.
Internet technology has had two main effects.
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The potential for the customer to link into the
manufacturer’s computers to check whether products are in
stock or to find out what are the delays.
The second is the development of Internet shopping where
customers check inventory on their computers, order what
they want and have it delivered to their houses.
Local government

Is the tier of government with the responsibility for planning
and zoning of land in its area.
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E.g for retail activities where previously it consisted of strip
developments in the main street of a suburb or town now it is about
development of malls

Local government is important because all the environmental
changes will impact on the lifestyles of people living in the
local government area.

The impacts include:


Noise and other types of pollution from the traffic and large trucks
servicing the centres
Ensuring adequate e.g. parking facilities available to support
development of large shopping malls