Chapter 7 Marketing Mix and Marketing Plan

What is marketing? Marketing… Marketing… –is not ADVERTISING –is not SELLING –is not PROMOTION “The aim of marketing is to make selling unnecessary.” Peter Drucker (1973) “The aim of marketing is to make selling unnecessary.” Peter Drucker (1973)

What is marketing? Businesses need to sell products if they are to achieve their objectives. Businesses need to sell products if they are to achieve their objectives. Marketing is about ensuring that businesses can sell as many products as possible in order to make profits. Marketing is about ensuring that businesses can sell as many products as possible in order to make profits.

What does it involve? Marketing is a very complex concept. Marketing is a very complex concept. It involves: It involves: – Research – Product design – Setting prices – Making sure the customer knows about products – Choosing how and where to sell products

Why is it needed? Each year millions of new products are launched: Each year millions of new products are launched: Without careful marketing these products would fail

“Marketing is the science and art of exploring, creating and delivering value to satisfy the needs and wants of a target market maintaining loyalty at a profit.” Professor Philip Kotler

NeedsEat, Dress, Move Wants Cheeseburger, Tuxedo, Car Marketer

The Marketing Mix The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment Traditional 4Ps extended to cope with today's changing environment Traditional 4Ps extended to cope with today's changing environment

The Marketing Mix

Product

Product The firm must come up with a product or service that people will want to buy. The firm must come up with a product or service that people will want to buy. It must fulfil some need It must fulfil some need or want. It must be (or at least seem) unique. It must be (or at least seem) unique.

Price

Price Pricing Strategy Pricing Strategy - International - International –Comparative –Cost plus The price must be one that the customer thinks is good value for money. The price must be one that the customer thinks is good value for money. This is not the same as This is not the same as being cheap! Prices have a great psychological effect on customers. Prices have a great psychological effect on customers.

Promotion

Promotion Strategies to make the consumer aware of the existence of a product or service Strategies to make the consumer aware of the existence of a product or service NOT just advertising NOT just advertising

The promotional message should Grab A ttention Stimulate I nterest Create D esire Promote A ction

Place

Place The means by which products and services get from producer to consumer and where they can be accessed by the consumer The means by which products and services get from producer to consumer and where they can be accessed by the consumer –The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?)

People

People People represent the business People represent the business –The image they present can be important –First contact often human – what is the lasting image they provide to the customer? –Extent of training and knowledge of the product/service concerned –Do staff represent the desired culture of the business?

Process

Process How do people consume services? How do people consume services? What processes do they have to go through to acquire the services? What processes do they have to go through to acquire the services? Where do they find the availability of the service? Where do they find the availability of the service? –Contact –Reminders –Registration –Subscription –Form filling –Degree of technology

Physical Environment

The ambience, mood or physical presentation of the environment The ambience, mood or physical presentation of the environment Packaging. Packaging. Internet/web pages. Internet/web pages. Paperwork (such as invoices, tickets,…..). Paperwork (such as invoices, tickets,…..). Brochures. Brochures. Furnishings. Furnishings. Uniforms. Uniforms. Business cards. Business cards. The building itself (such as prestigious offices or scenic headquarters). The building itself (such as prestigious offices or scenic headquarters). Mailboxes and many others Mailboxes and many others......

What Is A Marketing Plan? A marketing plan is an outline of price, date and quantity objectives used to generate a reasonable return for the business given the existing market conditions.

Types of Marketing Planning Strategic Marketing Strategic Marketing –Encompasses the entire farm strategy –Deals with the broader issue of determining firm ’ s strategic position in the market and how to create value from that position Product Marketing/Pricing Product Marketing/Pricing –Deals with the tactical side of selling a product –Similar to a set of standard operating procedures for marketing a particular product.

(Strategic) Marketing Plan 1. Environmental Analysis (SWOT) 2. Identifying Customers 3. Competitor/Value Creation Analysis 4. Marketing Mix: The 4 P ’ s 5. Financial Analysis and Budget 6. Implementation and Control Plan

1. Know Your Marketplace Strengths, Weaknesses, Opportunities, and Threats (SWOT) Strengths, Weaknesses, Opportunities, and Threats (SWOT) Trends and changes: Trends and changes: –Market analysis –Segmentation –Prioritizing target markets

2. Who Are Your Customers? Customer: firm or person that buys your product Consumer: firm or person that eventually uses your product Customers vs. Consumers

Customer/Consumer Trends Customers Just-in-time inventory Just-in-time inventory Business to business (B2B) Business to business (B2B) Manufacturing mentality Manufacturing mentality Industrialization of agriculture Industrialization of agriculture Consumers Households with fewer people Households with fewer people Active, on-the-go lifestyles Active, on-the-go lifestyles Concern over the health aspect of food, with a desire for good taste Concern over the health aspect of food, with a desire for good taste Less time for meal prep Less time for meal prep

Know What Is Important to Your Customer Get inside the mind of your customers Get inside the mind of your customers Find out why they would buy from you... or why they would not Find out why they would buy from you... or why they would not Truly understand their needs Truly understand their needs – Intentional listening – Customer analysis – Solve their problems

3. Competitor/Value Creation Analysis Competitive analysis Competitive analysis Reallocation of resources if necessary Reallocation of resources if necessary Positioning Positioning Make sure you are distinctively different from your competition in areas of importance to your customers

4. Determining the Marketing Mix The set of controllable variables that will accomplish the marketing objectives: The set of controllable variables that will accomplish the marketing objectives: Product strategy Product strategy Place (distribution) strategy Place (distribution) strategy Promotion (communication) strategy Promotion (communication) strategy Pricing strategy Pricing strategy

Pricing Methods Value-Based Pricing Value-Based Pricing –Set price based on buyers ’ perception of value (rather than on the seller ’ s costs) Cost-Based Pricing Cost-Based Pricing –Add a standard markup to the cost of the product Competition-Based Pricing Competition-Based Pricing –Set price based on following competitors ’ prices

5. Financial Analysis and Budgeting Estimate the demand given the pricing and promotion strategy. Estimate the demand given the pricing and promotion strategy. Determine expenses associated with production and marketing. Determine expenses associated with production and marketing. Determine anticipated cash flows. Determine anticipated cash flows. Will strategy cash flow? When? Will strategy cash flow? When? What are the critical assumptions of the financial analysis and what are the impacts of changes in those assumptions? What are the critical assumptions of the financial analysis and what are the impacts of changes in those assumptions?

6. Implementation and Control Focus attention of everyone on delivering what the customer wants Focus attention of everyone on delivering what the customer wants –Management of people –Monitoring and control