Products, Markets and Advertising Products, Markets and Advertising

Product Differentiation n The importance of non-price competition < product differentiation < product development < advertising and marketing n Features of a product < technical standards < quality standards < design standards < service characteristics < mix of attributes in different brands n The importance of non-price competition < product differentiation < product development < advertising and marketing n Features of a product < technical standards < quality standards < design standards < service characteristics < mix of attributes in different brands

Product Differentiation n Vertical and horizontal product differentiation < vertical product differentiation F importance of quality F importance of price < horizontal product differentiation F importance of specific features < market segmentation F targeting specific parts of the market F niche markets n Vertical and horizontal product differentiation < vertical product differentiation F importance of quality F importance of price < horizontal product differentiation F importance of specific features < market segmentation F targeting specific parts of the market F niche markets

Marketing the Product n Product / market strategy < alternative approaches < a growth vector matrix F market penetration F product development F market development F diversification n Product / market strategy < alternative approaches < a growth vector matrix F market penetration F product development F market development F diversification

Present New Present New Product Market A A B B C C D D Growth vector components Market penetration Market penetration Diversification Market development Market development Product development Product development

Marketing the Product n The marketing mix < product considerations < pricing considerations < place considerations < promotion considerations n The marketing mix < product considerations < pricing considerations < place considerations < promotion considerations

Target market segment Product line PackageProduct services Brand Shipping facilities Channel networks Inventory control Storage facilities Public relations Adverts Special promotions Personal promotions Basic price Transport and handling terms Credit terms Price alterations Product considerations Place considerations Promotion considerations Pricing considerations Considerations when marketing a product

Advertising n Background < advertising and the state of the economy n Background < advertising and the state of the economy

Total UK advertising expenditure

Advertising n Background < advertising and the state of the economy < distribution of advertising between media n Background < advertising and the state of the economy < distribution of advertising between media

UK total Advertising Expenditure (% of total) Source: Advertising Statistics Yearbook 2003(NTC Publications Ltd) National newspapers Regional newspapers Consumer magazines Business and professional Directories Press production costs Total press Television Direct mail Outdoor and transport Radio Cinema Internet Total100.0

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector

UK advertising expenditure by product sector (% of total advertising expenditure) Retail Industrial Financial Government Services Durables Consumables Total100.0 Source: Advertising Statistics Yearbook 2003(NTC Publications Ltd).

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio

Advertising/sales ratio: 2002 (ranked by advertising/sales ratio) Advertising/sales ratio: 2002 (ranked by advertising/sales ratio)

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy F differences in market structure n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy F differences in market structure

Advertising n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy F differences in market structure F differences in product characteristics n Background < advertising and the state of the economy < distribution of advertising between media < advertising expenditure by product sector n The intensity of advertising < the advertising / sales ratio < causes of differences in advertising intensity between the different sectors of the economy F differences in market structure F differences in product characteristics

Advertising n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Aims of advertising < shifting the demand curve < making the demand curve less elastic

P QO D1D1 Effect of advertising on the demand curve Q1Q1 P1P1

D2D2 P QO D1D1 Q2Q2 Q1Q1 P1P1

Q2Q2 D2D2 P QO D1D1 Q3Q3 Q1Q1 P2P2 P1P1

Advertising n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising

Advertising n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising < advertising and the long run n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising < advertising and the long run

Advertising and the long run Sales Habit salesDirect effect on sales Long-term effect Sales (weekly) Time Advertising campaign t1t1 t2t2 t3t3 t4t4 t5t5 s2s2 s3s3 s1s1 Sales

Advertising n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising < advertising and the long run < advertising and company growth n Aims of advertising < shifting the demand curve < making the demand curve less elastic n Effects of advertising < advertising and the long run < advertising and company growth

Product image and company reputation Relative quality of offering Relative price Advertising expenditure relative to competitors (Relative) customer value Real market growth Growth Market share Profit margins Advertising, profit margins and company growth

Advertising n Assessing the effects of advertising < benefits of advertising F to firms F to consumers < costs of advertising F to firms F to consumers and society generally n Assessing the effects of advertising < benefits of advertising F to firms F to consumers < costs of advertising F to firms F to consumers and society generally