1. Marketing
October 8, 2014

2. Marketing Definition
Marketing: All the activities involved in getting goods and services from the businesses that produce them to the consumers who wish to purchase them.
Two roles of marketing:
Sell what a business makes
Manage a business’s brand

3. Roles of Marketing

4. Branding – 3 Methods
A brand name is a word or a group of words that a business uses to distinguish its products from competitors’ products.
Many products combine their name with a special symbol that is associated with the product. This symbol is called a logo or trademark.
A slogan is a short, catchy phrase that is usually attached to the company’s name and logo.

5. Logos Logos take 5 possible forms Word Mark (Coca-Cola)
Letter Mark (IBM)
Combination Mark (Adidas)
Symbol or Icon (Apple)
Emblem (Harley Davidson)

6. Brand Identification
Once a company develops a name, slogan, or logo for a product, everything else associated with that product should carry the identification.
Logo Recognition
See how many logos you can identify from this alphabetical list.
Slogan Recognition
How many slogans do you recognize from the list handed out?

8. The Product Life Cycle The best marketing can be measured in two ways:
Sales analysis
Consumer reaction to the brand – a reaction based on marketing efforts.

9. The Product Life Cycle
Effective marketing increases brand equity: 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, non-profit organization, or event.
Better marketing develops brand loyalty.
The best marketing is marketing that develops brand insistence: the customer will accept no substitutes.

10. The Product Life Cycle
Product life cycle: the changes in a product’s popularity over time.
Style curve: graphic representation of a product’s success in the market, illustrating the volume of sales over time.

11. The Product Life Cycle 5 Stages Product Introduction (or launch)
Growth
Maturity
Decline
Decision Point

12. Stage 1: Product Introduction
At this stage, consumers don’t know the product exists.
Business needs to inform consumers about the product’s features, availability, package design, and brand identification.
Usually, curious or adventurous buy the product first. These consumers are called early adopters.
Other consumers look to early adopters, or trendsetters for information.

13. The Product Life Cycle

14. Stage 2: Growth
In this stage, marketers manage their products very carefully.
As popularity increases, competitors enter the market.
These competitors modify original product by adding features and improving quality, or sell at a lower price.
Competition fuels growth.
Consumers want to know what all the fuss is about.

15. The Product Life Cycle

16. Stage 3: Maturity At this stage, growth is flat.
New consumers replace those who leave to purchase a competing product.
Marketers manage mature products through continued advertising.
Reminding consumers of the benefits. (ex. Coca-Cola, Tide)
By now, manufacturers have long since paid for major production costs. Cost of sales and distribution are low.
These products are very profitable, known as cash cows.

17. The Product Life Cycle

18. Stage 4: Decline
At some point, most products fail to attract new customers.
Sales decrease and product enters stage of decline.
Seasonal changes or new competition may cause temporary decline.
If decline continues, businesses research their markets to determine if consumers are rejecting their brand.
Price change or ad campaign may help this.
If brand equity drops, that’s a problem.

19. The Product Life Cycle

20. Stage 5: The Decision Point
Final stage of product life cycle.
Decision must be made
Do we reposition? Try to make it popular in a new market.
“New and improved!”
New promotion and pricing?
If campaign succeeds, company may retain sales numbers and brand equity.
If not, product may be removed from market.
New technologies may render products obsolete. Marketing will not help.

21. The Product Life Cycle

22. Non-traditional Product Life Cycles
Fads
Niches
Seasonal

23. Non-traditional Product Life Cycles: Fads
Fad: a product that is extremely popular for a very short period of time.
Ex. Pogs, Tamagatchi, Atkins Diet
Imitation products at a cheaper price are called knock-off products.
Fad marketers enter late and stay too long.
When fads die, they die fast, leaving many businesses with large inventory and no buyers.

24. Non-traditional Product Life Cycles: Niches
Niche: a section of the market in which a product dominates and into which few competitors enter; a place or position particularly suitable to the person or thing.
By the time competitors develop, original producer has already distributed to those that want to purchase.
Not always the most profitable because of factors called barriers to entry.

25. Non-traditional Product Life Cycles: Niches
Barriers to entering a niche market:
Small market size
Cost of R&D
Advertising expense
Factory and equipment cost
Design costs
Lack of distribution channels
Cost of raw materials
High barriers to entry usually means competitors do not enter market.

26. Non-traditional Product Life Cycles Seasonal
Try to sell a snow shovel in August.
Patio furniture in December
Many products are only popular during a certain time of year.
With new seasons comes new styles
Manufacturers must make the most of their selling season.
Too much inventory is bad!
The balancing of product quantity with sales is called inventory management.

27. Marketing Concepts The Four Ps of Marketing The Two Cs of Marketing
Product
Price
Place
Promotion
The Two Cs of Marketing
Competitive Markets
Consumer Markets

28. The Four Ps of Marketing

29. Product (or Service) Businesses develop products for two reasons:
They can
There is a need
Product and service development take into account:
Quality
Design
Features
Benefits
Service & Support

30. Product (or Service): Quality
How good is the product?
Does it do what it is supposed to do?
Does it do this better than competing brands?
Will it last long?
Consumers will pay for higher quality
Some products are developed to lower standards.
Can we meet the consumer needs with a lower quality product?
These products will be less expensive

31. Product (or Service): Design
How things look.
Clothing
Cars
Coke bottle
Packaging also may protect products from tampering, dirt, air, etc.
Businesses want consumers to recognize and look for their product design.
What about service design?

32. Product (or Service): Features
Producers consider features such as materials, size, scent, taste, etc.
Service providers also focus on features
As a car rental company, will you pick up your clients?
How long does Apple allow you to rent movies?
What style of music does the DJ play?

33. Product (or Service): Benefits
We are not buying products, we are buying benefits.
When you buy a car, you are actually buying transportation.
When you buy food, you are actually buying nutrition.
Consumers must perceive there to be a benefit for them to actually make the purchase.

34. Product (or Service): Product/Service Mix
Retail stores do not just sell products
Delivery
Installation
Warranties
Alterations
Free parking
Every extra service or support offered gives consumers another reason to select that store over another
Service businesses also sell products.
Finding the right mix is important.

35. The Four Ps of Marketing

36. Price Businesses must decide at what price to sell products.
Lower prices may encourage more sale, but may not be worth it (remember equilibrium).
Some products are more price sensitive than others: how much sales will go up or down when the price goes up or down.

37. The Four Ps of Marketing

38. Place (Channels of Distribution)
Channels of Distribution: the paths of ownership that goods follow as they pass from the producer to the consumer.
Direct Channels
Indirect Channels
Specialty Channels
Also known ad distribution chain.
A product does not change in a distribution chain.
If it does change, a new distribution chain begins.

39. Place (Channels of Distribution)

40. Place (Channels of Distribution): Direct Channels
Direct channels of distribution: A direct connection between the consumer and the producer of a good or service; also known as a maker-user relationship
Does not use intermediaries: businesses that take possession of the goods before the consumer does.
Consumers feel more confident because they know the actual source of the product they are buying.

41. Place (Channels of Distribution)

42. Place (Channels of Distribution): Indirect Channels
Indirect channels of distribution: have one or more intermediaries. These intermediaries can be importers, wholesalers or retailers.
Importers: someone who seeks out foreign products to bring into his or her own country
Wholesalers: buy goods from producers or importers and resell the goods to retailers.
Wholesalers buy in volume. Located close to retailers and have large storage space.
Retailers: buys goods from wholesaler and sells to consumers.

43. Place (Channels of Distribution)

44. Place (Channels of Distribution): Specialty Channels
Specialty channels of distribution: any indirect channel of distribution that does not involve a retail store.
Vending machines
E-commerce
Door to door sales

45. The Four Ps of Marketing

46. Promotion Promotion is any attempt to sell a product.
Sales promotion encourages consumers to buy a product by using coupons, contests, premiums, samples and special events.

47. Promotion: Coupons
Coupons offer consumers money off the price of a product. They are treated as cash at the checkout counter.
Advertisers measure effectiveness of a coupon promotion by the redemption rate: the percentage of coupons that consumers actually use.
Average redemption rate is 5%. In general, the larger the value of the coupon, the higher the redemption rate.

48. Promotion: Contests
Contests are an exciting way to increase brand recognition and sales.
By law, businesses must organize contests so that anyone can enter (“no purchase necessary”)
Laws prohibit gambling in contests. Contests require people top either demonstrate a skill or answer a skill testing question.
Rolling up the rim passes as demonstrating a skill

49. Promotion: Premiums
Premiums are giveaways – something a consumer gets for free with the purchase of a product.
Many businesses encourage brand loyalty by giving away free products to regular customers.
Consumer loyalty cards: a card that is stamped each time a consumer buys the business’ product. This ensures sales.

50. Promotion: Samples Samples encourage a brand trial.
Usually a smaller “trial” size.
Samples can be delivered door to door, at point of sale, busy street corners, etc.
Price and other product information will be provided.
Very effective. Usually increases sales. But costs are very high.
WORD OF MOUTH

51. Promotion: Special Events
Marketers organize special events to attract customers and increase product sales.
Book signings, celebrity appearances, free concerts, etc.
Often include other types of promotions such as contests, premiums and samples.
Main purpose is to excite consumers.
Consumers will buy more if they are having fun.

52. Promotion Activity Students will break into 5 small groups.
Each group will be assigned a type of promotion
Coupons
Contests
Premiums
Samples
Special Events
Groups will find a company employing their type of promotion and do some research
Each group will present the details of their promotion (what is actually being done) and decide whether they think it is a good promotion (Will it increase sales? Am I more likely to buy?).

53. The Two Cs of Marketing
The two major external factors in marketing: the competition and the consumer.

54. The Competitive Market
The competitive market consists of all the sellers of a specific product, and is expressed most often in terms of the total dollars spent annually on this product.
Ex. The American soft drink industry is worth $68 billion. This means all manufacturers, bottlers, importers, and distributors share that $68 billion.
The percentage of the market that a company or brand has is called market share.

55. Market Share of Soft Drinks

56. The Competitive Market
A market segment is a part of the overall market that has similar characteristics.
Ex. Soft drink market segments
Root beer
Cola
Energy drinks
Etc
Ways to increase market share
Increase size of overall market
Taking sales from a competitor

57. The Competitive Market
Competition among Products
Direct competition: competition between products or service that are very similar.
Coke v. Pepsi
Indirect competition: competition between products or services that are not directly related to each other.
Pizza v. Concert tickets
Discretionary income: income you have that is not committed to paying for the basic necessities, such as food, clothing and shelter.
Disposable income: income used to pay for basic necessities. It is the amount of income left over after taxes have been paid.

58. Direct V. Indirect
This activity can be found on under the BBI section of

59. The Two Cs of Marketing
The two major external factors in marketing: the competition and the consumer.

60. The Consumer Market
Consumer market: all the potential users of a product or service.
Can be identified in at least two ways:
Demographics
Lifestyle

61. Demographics
Demographics is the study of obvious characteristics that categorize human beings.
Age
Gender
Family Life Cycle
Income Level
Ethnicity and Culture

62. Demographics: Age
Young children want toys, teens want computers, adults might be more interested in cars, seniors may want items to do with retirement.
Some age groups are consumers but not customers.
Consumers: people who use goods and services.
Customers: people who purchase goods and service.
Businesses often target the gatekeeper: the person who makes the buying decisions for a household.
Cereal companies will target parents by stating the health benefits for their children.

63. Demographics: Gender
Certain products are targeted at all genders, some to specific gender.
Women’s athletic shoes targeted at women.
Shopping roles have changed.
Power tools are not always targeted at men anymore.

64. Demographics: Family Life Cycle
Newly married or cohabitating couples need furniture.
Parents of babies need diapers, crib, car seat.
Your stage in the family life cycle often determines what you want and need
Businesses are aware of this demographic and compete for consumer $ in different ways for various groups.

65. Demographics: Income level
How much money you make.
Kellogg’s Corn Flakes are targeted at everyone.
Mercedes are targeted at those with more wealth.
To determine marketing efforts, businesses may look for postal codes of upper-class neighbourhoods. They may advertise in Forbes Magazine.

66. Demographics: Ethnicity and Culture
Canada has a very diverse population.
Look around this class!
Businesses compete for various groups by importing products from their home countries.
There are newspapers and magazines available in more than 100 languages
Many companies attracted business from specific groups, then competed for all groups.
Non-Italians at Italian restaurants.

67. Lifestyle
Lifestyle: the way people live, including their values, beliefs, and motivations.
The study of lifestyles is called psychographics.
A person’s beliefs will influence their decision making.
Vegans will not purchase steak.
A lazy person will not be interested in buying running shoes.

68. Marketing Concepts Review
What are the four Ps of marketing?
Provide an example of each:
Slogan
Family life cycle
Premium
Specialty channel of distribution
Product/service mix
What are the two Cs of marketing?
Define and give an example of market share.
Explain two possible ways in which a business could increase its market share.

69. Advertising
Advertising is the paid use of various types of media to try to convince consumers to buy a particular product. TV
Newspaper
Internet
Radio
Etc.

70. Creating Good Advertising
No one really knows… there is no magic formula for genius.
Advertisers want consumers to remember the brand and the name of the product.
Even if an ad is artistic or funny, if we do not remember the product or brand, the ad has not done its job.
There are four standard rules for creating good advertising:
Attract attention, gain interest, build desire, get action.

71. Creating Good Advertising

72. Super Bowl Commercials

73. Creating Good Advertising
Attract Attention
For print – a good headline
TV or Radio – hold your attention for 30 seconds when the fridge or bathroom beckon
Internet – get you to click
Gain interest
Print should be simple and easy to read
TV and radio should be easy to understand
Make people want to read or watch or listen

74. Creating Good Advertising
Build desire
Help the customer want your product
Describe benefits – Snicker: Hungry? Why wait?
Get Action
Ask for the sale!
Summarize reasons to buy
Make it easy for customers to buy, especially online
TV or radio – repeat phone numbers or website
Print – In North America, most important information starts to left

75. Types of Advertising
Remember that advertising is the paid use of various types of media to try to convince consumers to buy a particular product.
Publicity is information about a business, either positive or negative, that appears in the media and is not paid for.
More trusted than advertising

76. Types of Advertising Direct to home Out of home Radio Television
Newspaper
Magazine
Internet

77. Comparing Types of Advertising
Reach - # of people exposed
Frequency - # of times audience will see or hear
Selectivity – ability for the medium to focus on target audience
Durability – how long ad lasts (ie. Radio is 30 seconds, newspaper is 1 day)
Lead time – how fast the ad can be ready to run
Mechanical requirements – how complex it is to create ad
Clutter – competition for the audience’s attention
Cost – accumulated costs of running the ad

78. Comparing Types of Advertising

79. Advertising Review What are the two most selective media? Explain why.
List five types of advertising.
What are the four standard rules for marketing?
Why does out-of-home advertising have a reach score of 10?
Describe an advertisement you think is good. Why do you think that?

80. Marketing Research
Marketing Research is the collection and analysis of information that is relevant to the marketing strategy.
Types of marketing research:
Consumer research – what do consumers want?
Market research – what groups are interested?
Motivation research – how we think and feel about buying?
Pricing research – what price to sell at? How does price change demand?
Competitive research – look for areas of weak competition. What is the competition doing?
Product research – examines detail of product and how these impact the market
Advertising research – what is the most effective way to reach potential consumers?

81. Marketing Research Tools
Secondary data: information that others have collected and researches re-interpret for their own purposes.
Primary data: current information that researchers collect and analyze for a specific purpose.
Test marketing – limited release to test interest
Internal Information sources – analyze your own sales records, inventory, advertising and sales to predict future consumer behavior. Also called data mining.
Surveys – carefully planned questions used to gather data.
Open-ended & close ended questions
Observation – researches watch consumers behaviour
Focus groups – a company arranged meeting of potential consumers