1. Marketing

2. 1. Marketing includes all activities involved in getting goods and services from the business that produces them to the consumers who wish to purchase them. Marketing includes research, development, sales, distribution, advertising, and promotion, but does not include the production of goods and services. The two fundamental roles of marketing are to sell what business makes and to manage a business’s brand or brands 2

3. GroupHow is marketing usedArea of marketing ManufacturersUse research to know what to makeResearch Importers, wholesalers, and retailers Use channels of distribution to get their new products into the hands of consumers all over the world Distribution ProducersUse marketing to sell products to storesSales StoresUse marketing to sell products to consumersSales Service businessesUse marketing to let people know where they are and what they offer Advertising and promotion Non-profit organizations Use marketing to promote their servicesAdvertising and promotion 3

4. 3. A brand name is a word or a group of words that a business uses to distinguish its products from the competitors’ products. It is the most important part of a product or company’s image because it is how the company is identified. It should be distinctive, stand out from the competition, and be easy to remember 4. A logo is a special symbol that is associated with a product. A logo can take the form of a monogram, whish is a stylized rendering of the company’s initials or a combination of initials and numbers, such as KFC or 3M. Some companies use monograms to update an image that has become outdated and undesirable. Logos can also be visual symbols(e.g. line drawings of people, animals, or things) such as Apple computer’s logo. A logo can be a abstract symbol; a shape that carries a visual message but is not representative of an actual thing. Often these types of logos are not distinctive enough to stand out from other symbols. Nike’s swoosh is an example of an effective abstract symbol. 4

5. 5. A slogan is a short, catchy phrase that is usually attached to the company’s name and logo. It is often used as a tagline in both print and broadcast advertisements. Just hearing the slogan will often remind you of the entire ad. And example of an effective slogan is “Obey you thirst” from Sprite 6. Once a company develops a name, slogan or logo for a product, everything associated with that product should carry the identification. A business wants to make sure no consumer ever has to guess whether its product is the one they want. Competition is so fierce that no company wants its product to get lost on a store shelf, especially after spending a great deal of money promoting the brand 5

6. 7. Brand equity is the value of the brand in the marketplace. Good marketing develops brand awareness: customers can name your brand as part of a specific category, whether it is a product, service, or non-profit organization, or event. Better marketing develops brand loyalty: customers prefer your brand and support it. The best marketing is marketing that develops brand insistence: the customer will accept no substitutes. Products that have reached the brand insistence level have enormous brand equity 8. A style curve is a graphic representation of a product’s success in the market, illustrating the volume of sales over time. Marketers determine what type of marketing efforts to use based on where a brand is in the product life cycle 6

7. 9. Introduction: the product is launched into the marketplace. Consumers are unaware of the product and need to be informed about the product’s features, availability, package design, and brand identification. Selling is focused on early adopters in the hope that they will influence others to buy the product Growth: once early adopters find a use a new product, others soon try it and sales increase rapidly. Marketers manage their products very carefully. As a product’s popularity increases, competitors enter the market and modify the original product, either by adding features and improving quality or by making a similar product more cheaply and offering it at a lower price. New competitors enter the market and dilute profitability. Others, unsuccessful at making any money or attracting enough customers away from originators drop out of the race. Finally, at the top of the growth cycle, only a few winners survive 7

8. Maturity: growth is flat: neither increases or decreases. New consumers replace those who leave to purchase a competing product. Brand equity is at its highest point. Products are managed through continued advertising to keep the brand in the public eye and remind consumers of its advantages over the competition. Costs of sales and distribution are low because the product has established an effective distribution method and usually makes large profits as a result. Often called cash cows because the income they generate can help develop and fund new projects Decline: products enter the decline stages as sales decrease. A temporary decline may be cause by seasonal change or new competition. But if the decline continues, businesses research their markets to determine whether consumers are actually rejecting the brand. A small change in price or a new advertising campaign can reverse a temporary decline. If brand equity drops, the business has a serious problem 8

9. Decision point: whatever brand equity is let is used to reposition a products and make it popular again with a new consumer market. Businesses can reformulate, repackage, and re-introduce a “new and improved” product. Most often, a new promotion and repricing are used to attract a new market. If these sales strategies work the brand regains its original sales figures and brand equity. If the decline continues in spite of efforts to stop it, the manufacturer discontinues the product and removes it from the market. New technology can make old products obsolete and no amount of marketing can restore life to these products 10. Three types of non-traditional life cycles are fads, niches, and seasonal 9

10. 11. A fad is a product that is extremely popular for a very short period of time (usually less then a year) and appears in a very select target market (usually the under-14 set). A trend lasts a lot longer than a fad and influences numerous other areas. Pogs and Tamagotchies are examples of fads. Low-carb diets were a trend that crippled businesses such as Krispy Kreme 12. If a business can sell most of its stock of a fad and get out of the market just as the fad reaches its peak, the business will make an excellent profit. Many fad marketers, particularly those who make knock-offs, enter the market at the wrong time or stay too long. When a fad dies, it dies quickly and many business get caught with a large inventory that no one wants to buy 10

11. 13. A niche is a selection of the market in which a product dominates and into which few competitors enter. Niche products have a very short growth stage that leads to a solid, but not financially spectacular, maturity stage. Niche marketers usually invent their products and hold exclusive patents and formulas. By the time other business can invent a competing product, the original manufacturer has already distributed its brand to most of the businesses of stores that wish to purchase it, and competitors have no one to sell their product to. Often, niche marketers manufacture specialty parts 14. Barriers to entry into a market include small market size, the cost of research and development, advertising expenses, factory and equipment costs, design costs, lack of distribution channels and the cost of raw materials 11

12. 15. The seasonal selling season is short, and these business must keep adequate stock; however, if they have to much inventory left over at the end of a season, many of the products will be out of style when the season starts again next year. Therefore, it is important to balance product quantity with sales 12

13. 4. These brands have likely reached the maturity stage because brand equity is at its highest point 13

14. 1. Product concept marketers:  Product:what a firm should make and sell  Price:what price will stimulate sales and generate a profit  Place: where and how to sell the product  Promotion: what advertising and promotion should be created to boost product sales Market concept marketers:  Competitive market:all the products or services that might take sales away from a firm  Consumer market:all the people who are or might become interested in buying the product or service 14

15. 2. Quality: if you improve the quality of your product, you will attract more customers. Many established brand names take pride in their quality, and consumers come to depend on it. If some products can meet a customer’s need and be less expensive because the don’t provide high quality, the product or service has a good chance for success as well Design: when designing a package, product developers consider the package’s functions, including protecting the product from light, dirt, germs, air. Water, tampering, and damage. A good package makes it easy for the consumer to use and identify the product. Package labels also help consumers identify the product and can make the product stand out from competitors 15

16. Features: product developers consider the features of products, such as the material use in construction, the scent, the size, or the taste. Service providers outline what they do. Service features are in the details Benefits: each product or service has benefits that attract different consumers. The consumer must perceive these benefits in order to be interested enough to buy Product/service mix: retail stores provide services that add value to the products they sell, including delivery and installation. Many service businesses sell products, such as popcorn at a movie theatre. The right product/service mix can increase sales to existing customers and can attract new customers by helping the store be competitive 16

17. 3. Pricing decisions can make the difference between a successful product and a failure. Consumers are very price aware, and with the ability to check out competing prices on the internet, they will not buy a product if the prices are too high. For this reason, it is important to be aware of how price sensitive a product is in order to determine how much sales will go up or down when the price goes up or down. Price must always be similar to the price of competitive products. If the product appears to be similar, but carries a much higher price, the marketing mix should increase the promotional component and make sure consumers know they are paying more for more 4. Channels of distribution are the paths of ownership that goods follow as they pass from the producer to the consumer. They are the methods that a business uses to sell and distribute it’s products 17

18. Direct channels: products are sold directly to the consumer, eliminating the costs of intermediaries. The maker-user relationship allows consumers to inform business about their needs, and may increase consumer confidence Indirect channels:  Importers: importers search for foreign products to bring into the country, negotiate distribution deals with foreign manufacturers, buy and store merchandise, and the sell it. Some only arrange for delivery to local business  Wholesalers: wholesalers buy goods in volume from producers or importers and resell them to retailers in much smaller quantities. Retailers who use wholesalers often pay more for a product than those who buy directly from the manufacturer  Retailers: retailers link directly to consumers, as they buy merchandise that consumers want, have it in stock when consumers want it, and display the merchandise so consumers can examine it in an easy-to-reach location 18

19. Specialty channels:  Vending machines: vending machines are placed where consumers work, study, shop, or travel. If the manufacturer owns the machine, it dispenses only its own products, and there is no competition unless a rival producer’s machine is nearby  Telemarketing: telemarketing involves a sales pitch to consumers over the phone. Many consumers find telemarketing annoying, which may lead to negative reactions to the product or service  Catalogues: catalogues provide information about merchandise that consumers can purchase by mail, phone, or at the store, if one exists. Although they can be expensive to produce, catalogue businesses can be very successful  E-commerce: E-commerce offers consumers convenience and competitive prices, while cutting out intermediaries for manufacturers and retailers, which reduces costs. It allows even small entrepreneurs to compete globally 19

20. 6. Coupons: coupons offer consumers money off the price of a product. Because most coupons end up in the trash, advertisers measure the effectiveness of a coupon by the redemption rate, or the percentage of coupons that consumers actually use. An average redemption rate is 5%. In general, the larger the value of the coupon, the higher the redemption rate will be Contests: contests are an exciting way to increase brand recognition and sales. By law businesses most organize contests so that anyone can enter, whether the person buys a product or not. There are laws that forbid the use of gambling in contests. Contests must require people either to demonstrate a skill or to answer a skill-testing question Premiums: premiums are giveaways of free items with the purchase of a product, which usually carry the company’s logo to establish brand recognition. Customer loyalty cards, which entitles customers to a free product when the card is completed, ensure sales because customers must buy the product to get the premium 20

21. Samples: samples encourage brand trial. Samples can be distributed door-to-door or at booths at a supermarket, big box stores, and shopping centers. Information about the product, its price, and where it can be found in the store is provided along with the sample. Although the costs are high, sampling is a very effective method of sales promotion and usually results in increased sales Special events: marketers organize special events to attract customers and increase product sales. Celebrities take part in special events to promote their athletic shoe, new perfume, latest movie, or current CD. Sometimes, special events include contests, premiums, and samples. The main purpose is to excite customers, encourage their participation, and ultimately, get them to buy the product 21

22. 7. The competitive market consists of all the sellers of a specific product and is expressed most often in the terms of total dollars spent annually on the product. 8. The percentage of the market that a company or brand has is its market share. A market segment is a part of the overall market that has similar characteristics 9. A company can increase its market share by increasing the size of the overall market. Adding a new market segment adds new customers, increasing the size of the market, and increasing sales. The second way to increase market share is by taking sales away from competitors 10. Indirect competition is competition between products or services that are not directly related to each other. For example, Cds and clothes compete for a consumer’s spending dollar. Direct competition exists between products that are very similar, such as Coke and Pepsi. Minor differences in image, quality, price, design, features, and benefits influence which product is purchased 22

23. 11. Businesses use demographics, the study of obvious characteristics that categorize human beings, to target specific consumers 12. A) age defines our tastes as well as our wants and our needs. Kids are customers, but not often consumers because an adult, usually a parent, acts as a gatekeeper and directs the child’s purchase. Products are sold to gatekeepers but are also targeted at children, who have some influence over the decisions their gatekeeper makes B) for items such as clothing and shoes, businesses still distinguish between men’s and women’s product lines. However, many products that were formally targeted at females (detergents, disposable diapers) or males (cars, power tools) are now being advertised and sold successfully to both genders because purchasing decisions are now more likely to be shared. C) family life cycle stage often determines a person’s wants and needs. Businesses compete for consumer dollars in different ways, depending on the group they are trying to attract. D) consumers are often grouped by how much money they have or earn. This grouping affects what products or services a business tries to sell to them. Most manufacturers and retailers make and sell products to consumers with average incomes and are mainly interested in competing for discretionary income that almost all consumers possess E) many Canadian cities have ethnic communities with businesses that target the various wants and need of a particular ethnic group. These businesses compete for a cultural market by importing goods from the consumer’s country or origin or producing goods reflective of that country 23

24. 13. Psychographics is the study of lifestyles, which is the way people live, and this includes their values, beliefs, and motivations. A person’s beliefs influence what he or she purchases, so unless companies consider lifestyle marketing, the potential consumers in these groups will miss the messages 24

25.  Hewlett-Packard vs. Dell computers: direct. Quality, features, benefits, product/service mix, price, channels of distribution, promotion  Book vs. movie: indirect  Neutrogena vs. Bioré facial cleanser: direct. Image, design  Kleenex vs. Puffs facial tissue : direct. Quality, design, price, promotion  Concert tickets vs. new outfit: indirect  Aquafresh vs. Arm & hammer toothpaste: direct. Quality, design, features, benefits, price, promotion  Hyundai vs. Mercedes: direct. Quality, design, features, benefits, product/service mix, price, promotion  Cruise vs. all-inclusive resort vacation: direct. Quality, benefits, product/service mix, price, promotion 25