1. MGT-519 STRATEGIC MARKETING AAMER SIDDIQI 1

2. LECTURE 20 2

3. RECAP Branding Origins of branding Necessity of branding Strategy to differentiate Customer satisfaction Representation of the brand’s values Why do we brand products 3

4. RECAP Strong brand key to commercial High brand equity Increased product awareness 4

5. THE MARKETING MIX Marketing Mix developed in the early 1960s by Professor Neil Borden of the Harvard Business School Identified a number of company performance actions he believed influenced the consumer decision to purchase goods or services Borden suggested that these actions represented a “Marketing Mix”, Suggested that the Marketing Mix could be summated into four elements: – product – price – place and – promotion 5

6. THE MIX Thus was codified the famous four Ps (4Ps) which have gone on to become perhaps the most famous term in marketing to date As with any ‘mix’ the concept is straightforward; It provides a list of basic elements whose proportions can be altered to produce a variety of ‘mix’ with different outcomes e.g. cement as opposed to mortar, bread as opposed to cake. – In fact to illustrate this let’s think about a cake mix. All cakes contain eggs,milk, flour, and sugar. Can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar, for a fruit cake add fruit, chocolate cake – add chocolate. 6

7. PRINCIPLES OF MARKETING MIX Exactly the same principles apply with the marketing mix. The offer you make to you customer can be altered by varying the mix elements. So for a high profile brand, increase the focus on promotion and desensitize the weight given to price For a luxury item you control distribution – Place – optimise the quality – product - and quite probably maximise the price Co-ordinating the decisions is based on marketing research and results in a marketing plan 7

8. OPTIMUM USE OF BUSINESS RESOURCES A blueprint to optimise the use of the business’s resources to maximise the satisfaction to the customers and the gains of the business There are major differences when it comes to services marketing versus the marketing of tangible products. The aim differences include: 1. The buyer purchases are intangible, you gain ‘ownership’ of nothing 2. The service may be based on the reputation of a single person or entity, so branding becomes vital 8

9. 3. It's more difficult to compare the quality of similar services, there isn’t a list of Features and attributes you can easily compare 4. The buyer cannot return the service; the act of purchase is the act of consumption 9 OPTIMUM USE OF BUSINESS RESOURCES (CONT’D)

10. EXAMPLE- Car Insurance. In terms of the 4Ps you ‘own’ a right to compensation if in any sort of accident – that’s the product. You know the price and indeed all the other elements of price that might be included, e.g. payment by instalment. The Place was done either indirectly – through the mail as an automatic renewal, or directly by you contacting the insurance company. Promotion could have been via any of the means listed later in this chapter. But does that cover all the elements that went into your decision to buy car insurance? 10

11. NEW ELEMENTS IN THE MIX The differences mean that there are new elements in the marketing mix; in fact there are three new elements so we call this the ‘7Ps’ or Extended marketing mix the additional ‘4Ps’ of the ‘7P’ extended marketing mix consist of People Physical evidence and Process. 11

12. In car insurance example, potential user might have spoken to a salesperson or a broker or with a customer service person by phone, or at a branch office. Might have been impressed by industry reports or experts, this could have even been online, or by the quality of the documents received or even by the way the person sounded or were dressed. All of these start to bring Physical evidence into play which often overlaps into the Place and People elements. 12 NEW ELEMENTS (CONT’D)

13. DISTANCE PURCHASING Today’s world is dominated by distance purchasing via electronic media such as the internet and telecommunications The speed, accuracy responsiveness, and reliability of the processes are vital 13

14. SERVICESCAPE Service marketing also includes the concept of ‘servicescape’ Refers to but not limited to the aesthetic appearance of the business from the outside, Inside and the general appearance of the employees themselves In essence the concept of servicescape underlines the interrelated nature of several elements of the 7Ps when viewed from a customer perspective – it is a marketing concept philosophy approach. 14

15. SERVICE MARKETING Service Marketing has been rapidly gaining ground in the overall spectrum of marketing Focus of marketing education as the developed economies move farther away from industrial importance to service oriented economies. This can also be seen in developing economies The shift to services means a shift away from customer decisions based on tangible FABs to intangible service elements. 15

16. EXPERIENTIAL MARKETING In services, marketing is rapidly moving into experiential arena An emphasis on quality of experience and feedback This has given rise to the phrase "Managing the evidence" Refers to the act of informing customers that the service encounter has been performed successfully by us and how was it for you. Done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons. 16

17. SUMMARY History of marketing mix Principles of marketing mix Optimum use of business resources The new elements in marketing mix Distance purchasing Servicescape Service marketing Experiental marketing 17

18. THANKYOU 18