Session Marketing Mix

Session Outline Market Positioning Mix Elements Perceptual Maps Marketing Mix 4 C’s People

This Session Weekly Activity:Positioning Business Answer the 3 Levels of Strategy questions for your business: Corporate - What business should I be in? Business - How should I compete against my competition? Functional - What strategies will I use to my position my business to my target customers? The answers to these questions will form the basis for implementing your Marketing Plan.

Market Positioning ‘…developing a specific marketing mix to influence potential customers’ overall perception of the organisation itself, a brand, a product range or line.’

Topic Example Video The following video discusses market positioning. Take note of the key points. http://www.youtube.com/watch?v=4VxI85DvQjM

Market positioning ‘…developing a specific marketing mix to influence potential customers’ overall perception of a brand, a product line or the organisation itself. The way the product is perceived by the consumers on important criteria’ (McColl-Kennedy et al. 1999, p.266) Salient attributes are the important features or benefits the product offers.

Product positioning The way that the product is defined by consumers based on important attributes. The place that the product occupies in the consumers’ minds relative to competing products. Product positioning map shows how consumers perceive competing products that serve a particular need based on a set of key attributes.

Image Positioning An image statement is a general message often using semantics to communicate to people: Image positioning involves creating consumer associations that are strong, favourable or unique when compared with the competition. An outline of benefits and advantage points Product position enhancement Basis for advertising appeals

Branding A name, term, sign, symbol or design, or combination of these, intended to identify the goods or services, of one seller or group of sellers and to differentiate them from those of competitors.

Topic Example Video The following video highlights how branding can be used for positioning. Take note of the key points. http://www.youtube.com/watch?v=lIq_8MUPz5w

Positioning to target segments Need to consider: Positioning Strategies Marketing Mix Elements Level of Product Consumer Behaviour

Designing the right marketing mix The most creative & challenging step in marketing is designing the right marketing mix The marketing mix is the specific collection of actions & associated instruments employed by an organisation to stimulate acceptance of its ideas, products & services

Seven marketing mix elements

Total Offer to the Customer First, the firm chooses the product to meet the identified need of the target segment Second, the right distribution channel is used to make the product available Third, the firm undertakes eye catching promotion Fourth, the price platform is acceptable to the customer & firm

Perceptual Map Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Topic Example Video The following video the use of perceptual maps to identify market gaps. Take note of the key points. http://www.youtube.com/watch?v=BjkrdvDbIU0

Customer Focus Organisation Product (features & attributes) Price Placement (distribution) Promotion Customer Considerations (needs & wants) Cost Convenience (location) Communication

Product is the heart of the marketing mix What is a product? Product is the heart of the marketing mix Price Promotion Place (distribution)

Topic Example Video The following video discusses the difference between products and services. Take note of the key points. http://www.youtube.com/watch?v=AyyvFASW6Nw

Product & Service What will your product and service strategies be? Briefly describe your products - fuller details can be put in the Appendix.  How will you position your products in the market and how does that compare to the competition's positioning?  How will the product meet customer's needs?  After the product is sold to the customer what will the policies be for providing support, dealing with complaints and returned goods?  Describe the unique features of your product - these could be style, quality, brand name etc.  Describe the uniqueness of the packaging - size, shape, material etc.  Describe your service, warranty, repair and returns procedures.

What is the Product Concept? A product is a bundle of tangible and intangible attributes that satisfy a buyer’s needs and wants. Total product concept - consumers are buying the total bundle when they buy a product. Therefore, one physical product can target different market segments by varying the intangible component and thus satisfying different needs and wants of consumers.

Total Product

Topic Example Video The following video outlines the 3 levels of product. Take note of the key points. http://www.youtube.com/watch?v=g2OKqeKFndg

Levels of Product Products have three levels that need to be considered. These are; the core product - the benefits of the product for the consumer the actual product - the tangible or physical attributes of the product the augmented product - the intangible or additional elements of the product.

Service The result of applying human or mechanical efforts to people or objects.

Topic Example Video In the following video, Brian McCarthy discusses Pricing. Take note of the key points. https://www.youtube.com/watch?v=POTBei26Jow

Price Common pricing strategies: Cost plus pricing •Competition based pricing •Loss leader pricing •Promotional pricing •Skimming strategy •Penetration pricing •Premium pricing •Economy pricing •Value pricing •Dynamic pricing •Product bundle pricing 2 mins – if need to fill time, then ask students to research a couple of strategies and then have a class discussion.

Price What impact has the internet had on pricing? Allows price and product comparisons. Prices are coming down. Data collection allows sellers to tailor products and prices. 3 mins Invite students to answer the question at the top.

Placement How will you get your products to your customers? Describe how you ship your products to your customers.  What channels do you propose to use - will you distribute directly, through distributors or via wholesalers or a combination of all three?  Describe the channels you will use for each product for each target market segment. Describe what coverage they give. If using distributors or wholesalers, describe where they are located and what inventory levels they carry.

Topic Example Video In the following video, Brian McCarthy discusses Distribution. Take note of the key points. http://www.youtube.com/watch?v=Tb8bF2hCyLw

Major channels of distribution PRODUCERS OF CONSUMER GOODS Agents Agents Wholesalers Wholesalers Retailers Retailers Retailers Retailers ULTIMATE CONSUMERS

Topic Example Video In the following video, Brian McCarthy discusses Marketing Communications or more commonly, the Promotional Mix. Take note of the key points. https://www.youtube.com/watch?v=-U-FDO4nCAA

Promotional Methods Advertising Publicity Public Relations Personal Selling Media Announcements Sales Promotion Internet Product Launches Functions Direct-response Marketing

Promotional Mix What is the thrust of your marketing message? What must you convey to make them buy?  How will you inform your customers about your products?  What promotion strategy will you employ - advertising, telemarketing, seminars, trade shows, personal selling, public relations, testimonials?  Describe what media mix you will employ for advertising - magazines, newspapers, direct mail, television, yellow pages - and how often you will use them.  Describe the types of seminars and trade shows you will be using and the personal selling activities that you will use.

4Ps & 4Cs Four Cs The Four Ps is also being replaced by the Four Cs model, consisting of consumer, cost, convenience, and communication. The Four Cs model is more consumer-oriented and fits better in the movement from mass marketing to niche marketing.

Product- Consumer The product part of the Four Ps model is replaced by consumer or consumer models, shifting the focus to satisfying the consumer.

Price- Cost Pricing is replaced by cost, reflecting the reality of the total cost of ownership.

Place- Convenience Placement is replaced by the convenience function. With the rise of internet and hybrid models of purchasing, place is no longer as relevant as before. Convenience takes into account the ease to buy a product, find a product, find information about a product, and several other considerations.

Promotion- Communication Finally, the promotions feature is replaced by communication. Communications represents a broader focus than simply promotions. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the firm and the consumer.

Topic Example Video The following video highlights the 7 P’s. Take note of the key points. https://www.youtube.com/watch?v=ys7zx1Vc9po

Extended Marketing Mix There have been attempts to develop an 'extended marketing mix' to better accommodate specific aspects of marketing. For example, in the 1970s, Nickels and Jolson suggested the inclusion of packaging. In the 1980s Kotler proposed public opinion and political power

Booms & Bithner Booms and Bitner included three additional 'Ps' to accommodate trends towards a service or knowledge based economy: People – all people who directly or indirectly influence the perceived value of the product or service, including knowledge workers, employees, management and consumers. Process – procedures, mechanisms and flow of activities which lead to an exchange of value. Physical evidence – the direct sensory experience of a product or service that allows a customer to measure whether he or she has received value. Examples might include the way a customer is treated by a staff member, or the length of time a customer has to wait, or a cover letter from an insurance company, or the environment in which a product or service is delivered

Extended Marketing Mix Booms and Bitner included three additional 'Ps' to accommodate trends towards a service or knowledge based economy: People Process Physical Evidence

People People – all people who directly or indirectly influence the perceived value of the product or service, including knowledge workers, employees, management and consumers.

Process Process – procedures, mechanisms and flow of activities which lead to an exchange of value.

Physical Evidence The direct sensory experience of a product or service that allows a customer to measure whether he has received value. Examples might include the way a customer is treated by a staff member, or the length of time a customer has to wait, or a cover letter from an insurance company, or the environment in which a product or service is delivered.

Physical Evidence Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues.

Physical evidence There are many examples of physical evidence, including some of the following: Packaging. Internet/web pages. Paperwork (such as invoices, tickets and despatch notes). Brochures.

Physical Evidence Furnishings. Signage (such as those on aircraft and vehicles). Uniforms. Business cards. The building itself (such as prestigious offices or scenic headquarters).

7Ps & 7Cs The 7 Ps The 7 Cs Organisation Facing Customer Facing Product = Customer/ Consumer Price Cost Place Convenience Promotion Communication People Caring Processes Co-ordinated Physical Evidence Confirmation

Fundamental Actions The term 'marketing mix' however, does not imply that the 4P elements represent options. They are not trade-offs but are fundamental marketing issues that always need to be addressed. They are the fundamental actions that marketing requires whether determined explicitly or by default.

Choosing The Right Promotion Marketers need to consider: The target market. The nature of the product. The stage of the product’s life cycle. Money available for the promotion.

Topic Recap Video The following video recaps on the Marketing Mix. Take note of the key points. http://www.youtube.com/watch?v=ZoNZ_I5TYEk

Next Session Weekly Activity: Understanding Markets Select a category of passenger car from the list used by VFACTS. To find this list, go to www.fcai.com.au and click on “sales”, “cars” & “segmentation criteria” in the top menu With this category as a basis, describe (or profile) a market segment that would be interested in buying a new vehicle, using each of the segmentation approaches discussed as sub-headings. Explain your approach for each sub-heading.