2. Marketing – What do People Want “Give People What They Want”  Sellers steps to place product or service in hands of potential customers

3. Marketing Marketing is... ‘The management process responsible for identifying, anticipating and satisfying customer requirements profitably’ Chartered Institute of Marketing

4. Market segmentation  Splitting up the market into groups of people with similar needs and characteristics  Products and marketing activities can be tailored to the needs the segments  Markets can be segmented by age, gender, lifestyle, income and geography

5. Market research Market research is the process of collecting data about customers and competitors. There are two types of market research:  Primary research – gathering first hand data e.g. through questionnaires and focus groups  Secondary research – gathering existing data e.g. through trade journals and government statistics

6.  Market Types Market Types  Mass Market – paper towels, cell phones  Niche Market – cosmetics for sensitive skin, dog-walking service  Market Research Qualitative  Focus groups, 1 on 1 interviews, behavioral observation Quantitative –  Large samples  Use statistics to draw conclusions

7. The Marketing Mix

8.  Strategies & Activities Used by companies to sell goods, services

9. 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 encompass growth of service industry

10. Price

11.  Pricing Strategy  Importance of: knowing the market elasticity keeping an eye on rivals

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

13. Pricing strategies and tactics SkimmingLaunching with a high price when there is little competition, then reducing the price later. Often used with technology. PenetrationA low price is charged initially to penetrate the market and build brand loyalty. The price is then increased e.g. introductory offers on magazines. CompetitiveA similar price is charged to that of competitors’ products. Loss leaderProducts 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.

14. Pricing strategies and tactics PsychologicalA price is set which customers perceive as lower than it is e.g. $39.99 instead of $40. DifferentialDifferent prices are charged for the same product e.g. bus fares for children are cheaper than adult prices. Cost plus pricingAn additional ‘mark-up’ is added to the cost of producing a good or service. Strategic pricingPrice is set to position an exclusive product or brand to make it more desirable for consumers, generate demand or demonstrate value

15. Product

16.  ‘ 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  Products and brands may suggest certain images e.g. sporty, sophisticated, value

17. 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 Specialized versions New editions Improvements – real or otherwise! Changed packaging Technology, etc.

19. Product lifecycle The product lifecycle looks at the sales of a product over time

20. Stages of 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 stabilize, less expenditure on promotion needed, revenue & profit should be high Decline – sales decline, extension strategies can be adopted or the product withdrawn

21. 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 Extension strategies

22. Promotion

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

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

25. Types of promotion Above-the-line promotion This uses mass media advertising 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, sponsorship and social media

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

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

28. AIDA Promotional campaigns often take into account the AIDA model:  A wareness - raising awareness of a product  I nterest – exciting interest in the product  D esire – creating desire for the product  A ction – encouraging a purchase

29. Place

30.  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?)

31. 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 the last few years

32. Channels of distribution Manufacturer Wholesaler Retailer Consumer

33. People

34.  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?

35. Process

36.  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

37. Physical Environment

38.  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?

40. 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