B121 Chapter 11 Marketing

It is concerned with exchange relationships. Transactional marketing – oriented towards single purchase Relationship Marketing – oriented towards repeat sales.

Understanding customer behavior The traditional model Dimensions of decision making

Segmentation It is a process of breaking down a total market into smaller, more distinct segments that have a similar characteristics. Two phases of segmentation: Understanding the customer and the market Indentifying customer characteristics

The marketing mix It is a framework developed to help managers to consider all the relevant factors when designing and marketing their products to attract particular segments. The 4 (or seven) P’s The four C’s

Three level product analysis It provides a way of looking at products, and/or services, to analyze key features and benefits. Features of the three levels: Core product / service Actual product / service Augmented product / service

Branding It means creating an identity for a product, associating it with buying not just a product but buying into a lifestyle and certain values. Benefits of branding A good way of differentiating products. Customers can immediately identify specific products

Product life cycle It charts the progress of a product in the market from its introduction to its decline. The stages in a products growth Introduction Growth Maturity Decline

The Boston matrix It is intended to contribute to the management of organization’s cash flow. Using the matrix Problem child Stars Cash cows Dogs

Demand It is the extent to which people are able and willing to buy the product at different prices. The determinants of demand The price of product The prices of competing products The consumer’s income The consumer’s preferences

Pricing strategies Organizations need to set their pricing levels to meet all of the 4 criteria: Provide customer with value for money Cover the costs of the product Be competitive Be consistent with corporate objectives.

Pricing policies Penetration pricing Marginal pricing Market based pricing Loss leading Skimming

Price elasticity of demand It describes the way in which the demand for a product responds to a change in its price. If a small change in price leads to a large change in demand, a product is said to be highly price elastic. If the demand of product shows little response to change in price, the product is said to be price inelastic.

Distribution channels It is concerned with transporting goods and services in the most cost effective and efficient way, from where they are to where they need to be.

Issues to consider in distribution Cost Coverage Communication Control Competitive advantage

Promotion Marketing communication can be seen as a process of persuasion. AIUAPR model Awareness, Interest, Understanding, Attitude, Purchase, Repeat purchase.

Communication loop The loop reflects the long-term relationship between providers and users of goods and services. Stages are: Understanding user needs Identifying appropriate groups Providing information Collecting information Using this information Evaluating the effectiveness of the communication program

The communication mix A number of tools used by organization to communicate with their audiences. Together these tools are called as the communication mix.

Push & pull strategies Companies selling branded products with high level of consumer recognition are likely to focus their communication on advertising to increase the consumer awareness and to create a pull for the products that distributors respond to. Companies that are not market leaders, adopt push strategy which involves emphasis on promotional activities aimed at the distributor with the objective of encouraging them to push the product to the consumer.

Marketing plan It is a set of activities that details a company’s marketing effort. Marketing plan should answer the following: Where are we now? Where do we want to go? How will we get there? How will we ensure arrival?