1. Problem Solving Introduction to Marketing concepts
Andrew Triganza Scott MBA (Maas), M.Ed (Melit), B.Psy (Hons) PGCE 1 1

2. What is the marketing mix?
What you’ll learn...
Marketing
What is marketing?
What does it involve?
What is the marketing mix? 2

3. About Marketing 3 3

4. Marketing in the 21 century
WHY 4 4

5. What is marketing? Marketing…
is not ADVERTISING
is not SELLING
is not PROMOTION
“The aim of marketing is to make selling unnecessary.” Peter Drucker (1973) 5 5

6. What is marketing?
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. 6

7. What does it involve? Marketing is a very complex concept.
It involves:
Research
Product design
Setting prices
Making sure the customer knows about products
Choosing how and where to sell products 7

8. Without careful marketing these products would fail
Why is it needed?
Each year millions of new products are launched:
Without careful marketing these products would fail 8

9. “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 9

10. Cheeseburger, Tuxedo, Car
Needs
Eat, Dress, Move
Wants
Cheeseburger, Tuxedo, Car
Marketer 10

11. This Is Demand
Wants
Buying Power
“Demand” 11 11

12. First Task: Detect Needs12

13. Organization’s marketing focus
Marketing’s first task: Discovering Consumer Needs
Organization’s
marketing focus
Discover consumer needs
Information about needs
Potential consumers: The market 13

14. What is a Market? Potential consumers make up a market, which is:
1. People
2. with the Desire and
3. with the Ability to Buy a specific product. 14

15. Marketing’s Second Task: Satisfying Consumer Needs
Organization’s marketing focus
Concepts
for
products
Satisfy consumer needs
Find the right combination of:
Product
Price
Promotion
Place
Discover consumer needs
Information about needs
Goods, services, ideas
Potential consumers: The market 15

16. The Target Market
Because the organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers
This is the target market -- one or more specific groups of potential consumers toward which an organization directs its marketing programme 16

17. Customer Development Suspects Prospects Clients Advocates Partners
First-time
customers
Repeat
customers
Clients
Advocates
Partners
Disqualified
prospects
Inactive or
ex-customers 17

18. Marketing Vs Sales
Is there a difference? 18 18

19. The Marketing Concept
Organizations must concentrate on the customer and not the product or the company
Organizations should revolve round the customer and not the other way around
The purpose of a business is to create and keep a customer 19

20. The Selling Concept
Focuses on matching your product or service features and benefits in a way that suits the prospect sales
process is any thing that you do to close the sale and get signed agreement or contract
It is any thing that engages you with the prospect or customer on a personal level rather than at a distance 20

21. The Major Role of Marketing and Selling
People DO NOT buy products people buy 21 21

22. Marketing Management 22 22

23. Building Customer Relationships23

24. Relationship Marketing
Relationship marketing is linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits.
Mutual long-term benefits between the organization and its customers require links to other vital stakeholders-- including suppliers, employees, and “partners” such as wholesalers or retailers in a manufacturer’s channel of distribution. 24 24

25. How Marketing became so important?25

26. Four different orientations in the history of business
Production era
Sales era
Marketing concept era
SocietalMarketing era 26

27. The Marketing Mix
The marketing mix is the combination of variables that a business uses to carry out its marketing strategy and meet customer needs.
The marketing mix is often called the 4Ps:
Product
Price
Place
Promotion 27

28. 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
7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment
Traditional 4Ps extended to cope with today's changing environment 28 28

29. The Marketing Mix 29 29

30. Product 30 30

31. Product
Product’ refers to the functions and features of a good or service
Should satisfy the needs of the customer
May have a Unique Selling Proposition (USP)
‘Product’ also includes a range of factors such as packaging, quality, warranties, after-sales service and branding 31

32. Product
The firm must come up with a product or service that people will want to buy.
It must fulfil some need
or want.
It must be (or at least seem) unique. 32

33. Product
Methods used to improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g.
Extension strategies
Specialised versions
New editions
Improvements – real or otherwise!
Changed packaging
Technology, etc.
Image copyright: 33 33

34. The Product Life Cycle
The product lifecycle looks at the sales of a product over time 34

35. Stages in the Product Lifecycle
Development – high costs but no sales
Launch – high expenditure on promotion and product development, low sales
Growth – sales increase and product should break-even
Maturity – sales stabilise, less expenditure on promotion needed, revenue & profit should be high
Decline – sales decline, extension strategies can be adopted or the product withdrawn 35

36. Extension Strategies
Extension strategies should maintain or increase sales. They include:
Modifying the product
Reducing the price
Adding a feature
Promoting to a
different market
sector 36

37. Excitement and leisure T-shirts – photos with players
Product or service or brand
Core Product
Actual Product
Augmented Product
BMW
Freedom to travel
A motor car
Hilton
 Rooms
Room service
Air Malta
 Flight
An airline journey
Sliema Wanderers
Excitement and leisure
 T-shirts – photos with players
MAPFRE
Insurance policy
Finance
Daikin
 Cooling
Warranty 37 37

38. Price 38 38

39. Price The price of a product will depend on: The cost to make it
The amount of profit desired
Other objectives of the business
The price competitors charge
The price customers are willing to pay
Is there a high demand?
Is demand sensitive to changes in price? 39

40. Price
The price must be one that the customer thinks is good value for money.
This is not the same as
being cheap!
Prices have a great psychological effect on customers.
Pricing Strategy
- International
Comparative
Cost plus 40 40

41. Price Leader/Taker
Price leader – businesses that dominate the market can often dictate the price charged for a product. Other businesses follow this lead
Price taker – businesses have to charge the market price. This is often the case where there are many small firms competing against each other 41

42. Pricing Strategies & Tactics
Skimming
Launching with a high price when there is little competition, then reducing the price later. Often used with technology.
Penetration
Low price charged initially to penetrate the market and build brand loyalty; prrice is then increased e.g. introductory offers on magazines. 42

43. Pricing Strategies & Tactics
Competitive
A similar price is charged to that of competitors’ products.
Loss leader
Products may be sold at a price lower than the cost to produce it. Often used by supermarkets to encourage people into the store where it is hoped they will buy other products. 43

44. Pricing Strategies & Tactics
Psychological
A price is set which customers perceive as lower than it is e.g. €39.99 instead of €40 44

45. Price Pricing Strategy Importance of: knowing the market elasticity
keeping an eye on rivals
Image copyright: 45 45

46. Promotion 46 46

47. Promotion
Strategies to make the consumer aware of the existence of a product or service
NOT just advertising 47 47

48. Promotion The aims of promotion are to: Raise awareness
Encourage sales
Create or change a brand image
Maintain market share
Increase market share 48

49. 49 49

50. Promotion Above-the-line promotion
This uses advertising media over which a firm has no direct control e.g. television, radio and newspapers
Below-the-line promotion
This uses promotional media which the firm can control e.g. direct mail, sales promotions and sponsorship 50

51. The promotional message should
Grab Attention
Stimulate Interest
Create Desire
Promote Action 51 51

52. Promotional Activities
Advertising e.g. TV, billboards and internet.
Sales promotions e.g. Loyalty cards, BOGOF, discounts & free gifts
Sponsorship – a business pays to be associated with another firm, event or cause 52

53. Promotional Activities
Direct mailing – promotional material is sent to potential customers by post/
Public relations – building the relationship between the firm and the public by enhancing its reputation 53

54. Promotional Mix
Most businesses use a combination of different promotional activities.
The chosen promotional mix will depend on:
Cost
Target market
Product
Competitors 54

55. Place 55 55

56. Place
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?) 56 56

57. Place Products should be conveniently available for customers to buy
‘Places’ include:
Stores
Mail order
Telesales
Internet - The use of e-commerce (promoting and selling on the internet) has grown massively over recent years 57

58. 58 58

59. Jobber
One that buys merchandise from manufacturers and sells it to retailers 59

60. People 60 60

61. People 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? 61 61

62. People 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
Mission statement – how relevant?
Do staff represent the desired culture of the business? 62 62

63. People 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
Mission statement – how relevant?
Do staff represent the desired culture of the business? 63 63

64. Process 64 64

65. Process How do people consume services?
What processes do they have to go through to acquire the services?
Where do they find the availability of the service?
Contact
Reminders
Registration
Subscription
Form filling
Degree of technology 65 65

66. Physical Environment 66 66

67. Physical Environment
The ambience, mood or physical presentation of the environment
Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets,…..).
Brochures.
Furnishings.
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic headquarters).
Mailboxes and many others 67 67

68. 68 68

69. Physical Environment
The ambience, mood or physical presentation of the environment
Smart/shabby?
Trendy/retro/modern/old fashioned?
Light/dark/bright/subdued?
Romantic/chic/loud?
Clean/dirty/unkempt/neat?
Music?
Smell? 69 69

70. Stages in Consumer Decision Process
Word-
of- Mouth
Awareness
Advertising
Interest
Channel
Decision
Product /
Service
Action
Price
Satisfaction 70

71. The Marketing Mix Blend of the mix depends upon: Marketing objectives
Type of product
Target market
Market structure
Rivals’ behaviour
Global issues – culture/religion, etc.
Marketing position
Product portfolio
Product lifecycle
Boston Matrix 71 71

72. Marketing Model Target Market Aware Understand Believe Want Find Buy
Intention to Purchase
Understand
Believe
Cost
Want
Above the Line
Find
Below the Line
Point of Purchase
Buy
Revenue
Use
Experience
Value
Prefer
Loyal
Behavior 72

73. Marketing Management Philosophies
Competing
Philosophies
Production
Sales
Market
Societal Marketing 73 73

74. Marketing Management Philosophies
Philosophy
Key Ideas
Production
Sales
Market
Societal
Focus on efficiency of internal operations
Focus on satisfying customer needs and wants
Focus on satisfying customer needs and wants while enhancing individual and societal well-being
Focus on aggressive techniques for
overcoming customer resistance 74 74

75. Focus on Customer Wants and Needs
The Marketing Concept
Focus on Customer Wants and Needs
Achieve Organization’s Long Term Goals by Satisfying Customer Wants and Needs
Integrate Organization’s Activities to Satisfy Customer Needs and Wants 75 75

76. Selling goods and services
Comparing Sales and Market Orientations
Organization’s
Focus
Firm’s
Business
For
Whom?
Primary
Profit Goal?
Tools to Achieve
Inward
Selling goods and services
Everybody
Maximum sales volume
Primarily promotion
Sales Orientation
Market Orientation
Outward
Coordinated use of all marketing activities
Customer satisfaction
Specific groups of people
Satisfying wants and needs 76 76

77. Competitive Advantage Customer Satisfaction Customer Relationships
Developing Competitive Advantage
Competitive Advantage
Create
Maintain
Customer Value
Customer Satisfaction
Build
Customer Relationships 77 77

78. Evolving Marketing Mix
The marketing mix will evolve over time
The product portfolio may grow as a business becomes more established
More expensive promotional activities may be adopted as a firm’s revenue increases
More outlets may be opened, or products sold via the internet
Price may change as demand changes 78

79. Value and Satisfaction
Expectation
Performance
Expectation
Performance 10 10 8 8
If performance is lower than expectations, satisfaction is low.
If performance is higher than expectations, satisfaction is high. 79 79

80. Why Do So Many Products Fail?
market size may have been overestimated
actual product may not have been designed real well
competitors fight back harder than expected
priced too high
advertised poorly
Many new products fail due to many factors...the market may not have been researched properly and overestimated in size.
The design of the product may not be the best
The opposition or competition may be fierce competitors...more so than originally anticipated
Your product may be priced too highly or poorly advertised and marketed utilizing the wrong medium to reach your target audience.
Many times the corporate powers to be are not 110% behind a new product, thereby sentencing it to death even though it has an excellent potential and market.
R&D may be too high
Market positioning may be improper
corporate politics despite poor marketing research findings
costs of product development are higher than expected
incorrectly positioned in the market 80 80